Exterran to buy Chesapeake assets for $360M

HOUSTON — Natural gas services contractor Exterran Partners said Friday it plans to buy hundreds of midstream compression units from Chesapeake Energy for $360 million.

Many of the 334 units — located in the Eagle Ford Shale and the Permian Basin in Texas, and other liquids-rich shale reservoirs — are used to push natural gas into pipelines soon after it is extracted from the earth. Others are found at gas gathering systems or dot miles of pipeline.

The deal would push Houston-based Exterran’s working horsepower up 19 percent to 2.7 million horsepower. Exterran spokeswoman Susan Moore said the company expects Oklahoma City-based Chesapeake’s new, high-horsepower models to be in high demand as Exterran revamps its fleet.

“The acquisition is also consistent with our strategy to modernize and standardize our existing fleet,” Exterran CEO Brad Childers said in a written statement. The deal is expected to close between April and the end of June.

Exterran also said it has contracted the compressor units for seven years to Access Midstream Partners.

Access, an energy gathering systems operator, also announced Friday it has agreed to acquire compression units from Chesapeake. That $160 million deal, expected to close in the second quarter of 2014, would give Oklahoma City-based Access compression units at gathering systems in Ohio, Pennsylvania and West Virginia.

For Chesapeake, the two deals, worth a combined $520 million, are part of a continuing effort to shore up its balance sheet and steer capital to its core energy production business. The deal will also have “minimal impact” on Chesapeake’s outlook for its cash flow this year, Chesapeake Chief Financial Officer Domenic Dell’Osso Jr. said in a written statement.

Exterran Partners affiliate Exterran Holdings shares rose $1.10 in early trading Friday to $40.91 on the New York Stock Exchange. Chesapeake shares inched up 2 cents to $25.92 on the same exchange.