UPDATE 4-Chesapeake sells stake in assets to Sinopec for $1.02 bln
* Selling 50 pct stake in 850,000 shale field acres
* Some analysts expected Chesapeake to get a better price
* Chesapeake shares fall 4 percent
By Swetha Gopinath
Feb 25 (Reuters) - Chesapeake Energy Corp will sell a 50 percent interest in some of its oil and gas properties in the Mississippi Lime shale formation to China Petroleum & Chemical Corp (Sinopec) for $1.02 billion cash, a valuation that fell short of some expectations.
Shares of Chesapeake declined 4 percent in morning New York Stock Exchange trading following news of the deal on Monday.
Hammered by prolonged low natural gas prices and a hefty debt load, Chesapeake plans to sell up to $7 billion of assets this year to help close a $4 billion gap between capital expenditures and cash flow.
A number of Wall Street analysts had expected Chesapeake to bring in a higher valuation for the Mississippi Lime deal, but they welcomed the liquidity boost the cash deal brings.
"We're certainly not bowled over with the valuation paid, but Chesapeake remains in a position of needing to pare down the portfolio and increase liquidity," analysts at Wells Fargo wrote to clients. "This transaction helps towards accomplishing both goals." Continued...