2011-05-31-2011-05-03

To acquire producing assets in Midcontinent in VPP deal, gaining 80 MMcf/d, 180 Bcfe proved.

Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has agreed to monetize certain of its producing assets in the Midcontinent region through a 10-year volumetric production payment (VPP) to an affiliate of Barclays Plc for proceeds of approximately $850 million.

The deal involves approximately 180 billion cubic feet equivalent of proved reserves and approximately 80 million cubic feet equivalent per day of current net production. Chesapeake has retained drilling rights on the properties below currently producing intervals and outside of existing producing wellbores and the production "tail" beyond 10 years.

The transaction will be Chesapeake's ninth VPP and is expected to close in second-quarter 2011. Inclusive of the pending VPP sale and the company's eight previously closed VPPs, the company will have sold 1.215 Tcfe of proved reserves for total proceeds of $5.619 billion, for an average sales price of $4.62 per mcfe.