This excerpt taken from the CHK 10-Q filed Nov 9, 2007.
New Financing Plan
In early September 2007, we announced an enhanced financial plan designed to monetize unrecognized balance sheet value and to fully fund our planned capital expenditures through 2009 without accessing public capital markets. Since then, we have successfully implemented multiple aspects of the plan and anticipate further progress over the next two quarters. We believe our planned transactions described below will allow us to monetize over $4 billion of assets by the end of 2009.
Sale/Leasebacks. During the Current Quarter, we completed our third sale/leaseback transaction on 37 drilling rigs for net proceeds of approximately $235 million. We have now completed sale/leaseback transactions on a total of 70 rigs and anticipate completing similar transactions on our remaining 11 rigs during the fourth quarter of 2007, thereby completing the sale/leaseback of our entire fleet of 81 drilling rigs. Also during the Current Quarter, we completed a sale/leaseback facility for our natural gas compression assets. We received approximately $160 million for the sale/leaseback of our existing natural gas compression assets and we will finance up to $185 million of future natural gas compression assets under the same facility.
Producing Property Sales. We are currently in the process of monetizing certain Chesapeake-operated producing assets in Kentucky and West Virginia. The company intends to retain drilling rights on the properties below currently producing intervals and outside of existing producing wellbores. Chesapeake has received multiple attractive offers for the Appalachian assets with a variety of transaction structures. We anticipate completing a
monetization transaction by year-end 2007 for proceeds in excess of $1.0 billion. In addition, we also plan to pursue four more monetizations of similarly mature properties in 2008 and 2009 for further proceeds of approximately $2.0 billion.
The company is also currently in the process of selling non-core E&P assets in the Rocky Mountains and in the southeastern Oklahoma Woodford Shale play for expected proceeds in excess of $300 million. These sales are anticipated to close by the first quarter of 2008. In total, Chesapeake is anticipating receiving monetization and sale proceeds of approximately $3.3 billion by year-end 2009.
Midstream MLP. We are currently in the process of forming a private MLP to own a non-operating interest in our midstream natural gas assets outside of Appalachia, which consist primarily of gas gathering systems and processing assets. These assets, which are expected to grow substantially in future years, currently generate annualized cash flow from operating activities in excess of $100 million. We believe our MLP transaction will be valued at more than $1 billion and is anticipated to close in the first quarter of 2008.