A partnership between Chesapeake Energy Corp. (CHK), M3 Midstream and EV Energy Partners (EVEP) has set out plans to construct an extensive natural gas processing facility designed to collect and move shale gas produced in Ohio.
The total cost of the project is estimated to be US$ 900 million, which is due to be spent over the course of five years, with the majority of expenditure occurring in the first two years. Chesapeake affiliates have a 59% stake in the partnership, M3 Midstream hold 33% and EVEP hold 8%
Some shareholders have criticised Chesapeake for spending too much on Capex, however the company insists that it cannot afford to miss out on shale opportunities whilst prices are still low and has attempted to meet the demands for reduced spending with asset sales.
Total recently bought a stake in Chesapeake’s Ohio shale discovery for US$ 2.32 billion, which helped the company reduce it’s debt burden whilst improving production.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/14032012/chesapeake_energy_m3_midstream_and_ev_energy_partners_announce_partnership/