Chesapeake Energy will sell its Barnett Shale assets to a private-equity-backed firm and terminate current gas gathering agreements with Williams, the company announced Wednesday. Chesapeake said the move would increase its profits by $200 million to $300 million from 2016 to 2019 and reduce its expenses by $765 million through next year.
Meanwhile, Williams said it had committed to sign a new gas gathering agreement with Chesapeake’s successor firm in the Barnett Shale. Chesapeake is selling its assets to Saddle Barnett Resources, a company backed by private equity firm First Reserve.
Williams and Chesapeake also agreed to a revised contract in the mid-continent region, under which Chesapeake will pay Williams $66 million.
Williams said it would revive Barnett drilling and bring back unprofitable wells by establishing monthly gathering rates at a percentage of Henry Hub settlement prices through 2029. It said its new Barnett producer partner would put up $40 million per year in drilling commitments through 2018.
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