Chesapeake Energy (NYSE: CHK ) is continuing to hive off assets. In the latest of a string of divestments, the company has inked an agreement to sell its Midstream Gas Services subsidiary to SemGroup (NYSE: SEMG ) for a cash payment of $300 million.
The unit operates a set of gas gathering and processing assets located in the Mississippi Lime play. These include 200 miles of gathering pipeline, and a pair of cryogenic processing plants currently under construction. The first of the two plants is expected to come onstream in Q1 2014, while the second is planned to be operational in Q1 2016. Combined, both require additional capital expenditures of roughly $125 million, plus investment into future well connects.
SemGroup said it will fund the purchase under its existing credit facilities.