OKLAHOMA CITY & HOUSTON--(BUSINESS WIRE)--Mar. 13, 2012--
Chesapeake Energy Corporation (NYSE:CHK) today announced the execution
of definitive agreements to build the largest integrated midstream
service complex in eastern Ohio. Chesapeake, through affiliates of its
wholly owned subsidiary, Chesapeake Midstream Development, L.P. (CMD),
has entered into a partnership with M3 Midstream LLC (Momentum) and EV
Energy Partners, L.P. (NASDAQ:EVEP) to develop the midstream services
complex. The complex will provide necessary infrastructure to process
natural gas and natural gas liquids (NGL) in the liquids-rich Utica
Shale play in eastern Ohio.
The complex will consist of natural gas gathering and compression
facilities constructed and operated by CMD, as well as processing, NGL
fractionation, loading and terminal facilities constructed and operated
by Momentum. The state-of-the-art cryogenic processing facility will be
located in Columbiana County and have an initial capacity of 600 million
cubic feet per day. NGLs will be delivered to a central NGL hub complex
in Harrison County that will feature an initial NGL storage capacity of
870,000 barrels and fractionation capacity of 90,000 barrels per day, as
well as a substantial rail-loading facility.
The partnership plans to invest approximately $900 million over the next
five years with the majority of the capital invested in the first two
years. The current ownership structure of the partnership is 59% by
affiliates of CMD, 33% by Momentum and 8% by EVEP. Total E&P USA, Inc.,
Chesapeake’s 25% joint venture partner in the Utica Shale wet gas
acreage, has an option to participate in the project, which may
proportionately reduce the ownership of CMD affiliates and EVEP to 44%
and 6%, respectively. Significant engineering and procurement has
already begun for the project with the first cryogenic processing and
fractionation plants scheduled to be in service by the second quarter of
2013.
Mike Stice, CMD’s President, commented, “We are pleased to partner with
Momentum and EVEP to build a critically important link in the value
chain for the rapidly developing Utica Shale play. This partnership will
allow CMD to focus on building the extensive gathering and compression
requirements of the system, while leveraging the expertise of Momentum
to build and operate the processing and fractionation facilities. In
addition, the scope of this project will provide an economic boost for
companies and residents throughout Ohio as well as hundreds of
high-quality, well-paying, new jobs for Ohioans. We look forward to
joining with the citizens of Ohio to provide superior service and a high
quality, reliable stream of natural gas and NGL products to our
customers.”
Frank Tsuru, President and CEO of Momentum, stated, “Our partnership
with CMD and EVEP is a win-win situation for our companies and the
citizens of Ohio. We will invest significant capital and technical
resources to develop this project in a responsible manner, utilizing the
highest industry standards.”
Mark Houser, EVEP’s President and CEO, remarked, “We are delighted to be
a part of this next step in the development of the Utica Shale,
particularly with our partners CMD and Momentum, who have a proven track
record in upstream and midstream shale development. This investment
compliments EVEP’s asset base in Ohio, where EnerVest has a decade of
operating experience and a substantial Utica acreage position.”
ABOUT CHESAPEAKE:
Chesapeake Energy Corporation (NYSE:CHK) is the second-largest
producer of natural gas, a Top 15 producer of oil and natural gas
liquids and the most active driller of new wells in the U.S. Headquartered
in Oklahoma City, the company's operations are focused on discovering
and developing unconventional natural gas and oil fields onshore in the
U.S. Chesapeake owns leading positions in the Barnett,
Haynesville, Bossier, Marcellus and Pearsall natural gas shale plays and
in the Granite Wash, Cleveland, Tonkawa, Mississippi Lime, Bone Spring,
Avalon, Wolfcamp, Wolfberry, Eagle Ford, Niobrara and Utica
unconventional liquids plays. The company has also
vertically integrated its operations and owns substantial midstream,
compression, drilling, trucking, pressure pumping and other oilfield
service assets directly and indirectly through its subsidiaries
Chesapeake Midstream Development, L.P. and Chesapeake Oilfield Services,
L.L.C. and its affiliate Chesapeake Midstream Partners, L.P. (NYSE:CHKM).
Further information is available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information, presentations and news releases.
ABOUT M3 MIDSTREAM:
M3 Midstream, LLC (“Momentum”) is an independent midstream energy
company formed to build, acquire, own and operate midstream oil and gas
assets in growth areas of the United States. The company’s focus is the
development of greenfield projects that include oil and gas gathering,
compression, treating and processing. More information is
available at www.m3midstream.com.
ABOUT EV ENERGY PARTNERS:
EV Energy Partners, L.P., (NASDAQ:EVEP) is a master limited
partnership engaged in acquiring, producing and developing oil and gas
properties.
This news release includes forward-looking statements that give the
partnership’s current expectations or forecasts of future events,
including its plans to construct the described integrated midstream
service complex and the anticipated resulting benefits. Although
the parties believe the expectations and forecasts reflected in these
forward-looking statements are reasonable, there can be no assurance
they will prove to have been correct. Actual results can be
affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Factors that may cause actual results to differ
materially from expected results include the pace of development of the
Utica Shale, construction difficulties and delays and availability of
capital. You should not place undue reliance on the
forward-looking statements, which speak only as of the date of this news
release, and the parties undertake no obligation to update this
information.
Source: Chesapeake Energy Corporation and M3 Midstream, LLC and EV Energy Partners, L.P.
Chesapeake Energy Corporation
Investor Contacts:
Jeffrey L.
Mobley, CFA, 405-767-4763
jeff.mobley@chk.com
or
John
J. Kilgallon, 405-935-4441
john.kilgallon@chk.com
or
Media
Contacts:
Michael Kehs, 405-935-2560
michael.kehs@chk.com
or
Jim
Gipson, 405-935-1310
jim.gipson@chk.com