DOW JONES NEWSWIRES
Chesapeake Energy Corp. (CHK) unveiled a more than $1 billion
investment plan aimed at boosting U.S. natural-gas demand, the
latest private-sector initiative aimed at fostering consumption of
domestic fuel supplies that are expected to jump in coming
years.
The oil-and-gas company said it will spend at least $1 billion
over the next 10 years on a new venture-capital fund dedicated to
boosting domestic demand for natural gas. The fund, called
Chesapeake NG Ventures Corp., will invest in companies and
technologies that spur demand for domestically produced oil,
natural gas and natural-gas-to-liquids instead of other oil and
diesel fuels. Chesapeake said it plans to redirect about 1% to 2%
of its forecast annual drilling budget toward such projects.
The company also plans to invest $100 million in newly issued
convertible debt of Clean Energy Fuels Corp. (CLNE), a company
building natural-gas fueling stations for heavy-duty trucks.
Shares of Clean Energy Fuels were recently up 7.9% to $14.15
after-hours Monday. Its stock had been off 19% over the past three
months. Chesapeake shares were unchanged at $29.75 after-hours.
Chesapeake has already invested in one $50-million tranche of
the company's debt, with two more planned for June 2012 and June
2013. The convertible debt carries a 7.5% coupon and a 22.5%
conversion premium.
Chesapeake also agreed to spend $155 million on a 50% ownership
stake in Sundrop Fuels Inc., a biofuels company building a plant
capable of producing more than 40 million gallons of gasoline a
year from natural gas and waste-plant material.
The CNGV investment will be augmented by an added $20 million
pro rata investment by venture capital firm Oak Investment
Partners, an existing holder of the firm.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com