8-KMaterial AgreementsRegulation FDOther Events+1

EXPAND ENERGY Corp 8-K Report, Material Agreement (Dec 17, 2012)

Filed December 17, 2012For Securities:EXEEXEELEXEEWEXEEZ

Summary

EXPAND ENERGY Corp (EXE) filed an 8-K on December 17, 2012, to report a significant material definitive agreement. On December 11, 2012, an indirect wholly owned subsidiary, Chesapeake Midstream Development, L.L.C. ("CMD"), entered into a Unit Purchase Agreement with Access Midstream Partners, L.P. ("ACMP") to sell 100% of the equity interests in Chesapeake Midstream Operating, L.L.C. ("CMO"). CMO and its subsidiaries own midstream gas gathering, processing, and related assets across several key shale plays including the Eagle Ford, Utica, Niobrara, Haynesville, and Marcellus. The sale, referred to as the "CMO Sale," is valued at approximately $2.16 billion, subject to post-closing adjustments. The transaction is expected to close before December 31, 2012. This divestiture represents a substantial capital event for EXPAND ENERGY Corp, likely aimed at optimizing its asset portfolio and potentially generating significant cash proceeds. The filing also notes the termination of certain rights previously held by ACMP concerning midstream projects and services related to specific shale regions, indicating a potential strategic shift in asset development and partnership structures.

Key Highlights

  • 1EXPAND ENERGY Corp (EXE) subsidiary, CMD, to sell all equity interests in Chesapeake Midstream Operating, L.L.C. (CMO) to Access Midstream Partners, L.P. (ACMP).
  • 2The CMO Sale includes midstream gas gathering, processing, and related assets in the Eagle Ford, Utica, Niobrara, Haynesville, and Marcellus shale plays.
  • 3The transaction is valued at approximately $2.16 billion, subject to post-closing adjustments.
  • 4The closing of the CMO Sale is expected to occur before December 31, 2012.
  • 5The divestiture involves customary representations, warranties, covenants, and indemnification provisions between CMD and ACMP.
  • 6Certain provisions of a prior omnibus agreement between ACMP and affiliates of the Company will be terminated upon closing, impacting ACMP's rights of first offer on midstream projects and services.
  • 7An exclusivity agreement regarding potential sale of certain Mid-Continent midstream assets to ACMP has been extended to March 1, 2013.

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