Jan 2 (Reuters) - Chesapeake Energy Corp (CHK.N) said it monetized certain producing properties and sold a volumetric production payment (VPP) to affiliates of UBS AG UBSN.VX and DB Energy Trading LLC, a unit of Deutsche Bank (DBKGn.DE), for proceeds of $1.1 billion.
The VPP entitles the purchaser to receive scheduled quantities of natural gas from Chesapeake’s interests in over 4,000 producing wells, free of all production costs and production taxes over a 15-year period, the company said.
The deal includes portion of its proved reserves and production in certain Chesapeake-operated producing assets in Kentucky and West Virginia. The proceeds will be redeployed into its low-risk drilling program, the company added. (Reporting by Jennifer Robin Raj in Bangalore; Editing by Deepak Kannan)