CORRECTED-UPDATE 4-Chesapeake sells stake in assets to Sinopec for $1.02 bln

Mon Feb 25, 2013 8:39pm EST
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(Corrects acquirer to Sinopec Group in the first paragraph)

* 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 Sinopec Group 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.   Continued...