Embattled Chesapeake Energy has again turned to Wachtell, Lipton, Rosen & Katz for the $2.16 billion sale of most of its remaining holdings in various U.S. shale plays to Access Midstream Partners, which, in turn, has agreed to sell a stake in itself and its general partner to The Williams Companies for $2.4 billion.
Oklahoma City-based Chesapeake has been struggling to cope in recent months with more than $13 billion in debt and an inquiry into nearly $1 billion in alleged personal loans extended to CEO Aubrey McClendon, according to our previous reports. Throughout Chesapeake’s struggles, Wachtell has served as standing outside counsel to the company’s board of directors on corporate governance matters while also handling several major transactions for the company.
Wachtell corporate partner David Katz is leading a team from the firm advising the Chesapeake board on the company’s latest deal: the divestiture of its primary holdings in the Eagle Ford, Haynesville, Marcellus, Niobrara, and Utica shale plays to Access Midstream, which was spun off from Chesapeake earlier this year.
G. Alan Rafte, chair of the business and regulatory practice at Bracewell & Giuliani, is leading a team from the firm advising Chesapeake itself that includes antitrust partner Daniel Hemli, employee benefits partner Bruce Jocz, tax head Elizabeth McGinley, energy partner Gray Muzzy, corporate partners Connie Stamets and Michael Telle, and environmental and natural resources head Tim Wilkins.
Also advising Chesapeake on the deal is C. Ray Lees of the Oklahoma City-based Commercial Law Group. The Am Law Daily named Lees a Dealmaker of the Week last year for his work advising Chesapeake on the $4.75 billion sale last year of its interests in the Fayetteville shale play to Anglo-Australian mining giant BHP Billiton. Lees previously practiced at predecessor firm Self, Giddens & Lees with Shannon Self, a cofounder of the Commercial Law Group, former Chesapeake board member, and childhood friend of McClendon’s.
Lees, Bracewell, and Wachtell represented Chesapeake in September on the company’s $6.9 billion sale of properties in the Permian Basin in West Texas to several other oil companies. Lees and Wachtell also advised Chesapeake earlier this year on its $2.3 billion sale of Utica shale assets to French energy giant Total and both handled Chesapeake’s $315 million purchase of Bronco Drilling last year.
In September, Chesapeake hired James Webb, a former partner at top Oklahoma firm McAfee & Taft, as its new general counsel and senior vice president of legal. Webb replaced Henry Hood, who had served since 2006 as the company’s top in-house lawyer before being demoted to senior vice president of land and legal as a result of the loan scandal involving McClendon. V. Burns Hargis, a former partner at McAfee & Taft, is an independent member of Chesapeake’s board.
Latham & Watkins corporate partners Edward Sonnenschein and Eli Hunt in New York are leading a team from the firm advising Oklahoma City-based Access Midstream on its acquisition of shale assets once held by its former parent.
Other Latham lawyers working on the matter include corporate partners Jeffrey Munoz, Ryan Maierson, and Charles Carpenter, tax partners David Raab and Tim Fenn, finance partners Craig Kornreich and Catherine Ozdogan, employee benefits partners David Taub and Jed Brickner, antitrust partner Tad Lipsky and counsel Sydney Smith, environmental and land resources partner Joel Mack, investment funds partner Andrea Schwartzman, and project finance partner Ken Simon.
Hal Haltom, Jr., an energy partner with Andrews Kurth in Houston, is leading a team from the firm advising Access Midstream on the new commercial agreements it will enter into as part of the deal.
Jones Day energy cohead Jeffrey Schlegel and capital markets partner Darrell Taylor are leading a team from their firm advising Access Midstream on its acquisition of the Chesapeake shale assets, as well as the company’s sale of a 25 percent stake in itself and a 50 percent stake in its general partner to Williams. Other Jones Day lawyers working on the proposed deal include litigation partner Joshua Fuchs, tax partner Todd Wallace, labor and employment partner Mark Temple, and employee benefits of counsel Gary Short.
Suedeen Kelly, a former Patton Boggs partner who left that firm with a group of lawyers in early November for Akin Gump Strauss Hauer & Feld, is a member of the board at Access Midstream. (Kelly is also a former commissioner of the Federal Energy Regulatory Commission.) A conflicts committee at Access Midstream is being advised by Delaware firm Richards, Layton & Finger.
New York-based private equity firm Global Infrastructure Partners (GIP) will retain a 50 percent interest in Access Midstream’s general partner as part of the deal. Joseph Blum, a former cohead of the project development and finance practice at Latham, serves as GIP’s general counsel.
Tulsa-based Williams has turned to lawyers from Gibson, Dunn & Crutcher and Andrews Kurth for outside counsel on the deal. M&A partner Steven Talley, securities partners Richard Russo and Robyn Zolman, and finance partner Janet Vance are heading up the team from Gibson Dunn, which is working with Andrews Kurth tax partners Robert McNamara and Angela Richards. The in-house team at Williams is being led by senior counsel John Gammie and Tami Anderson and assistant general counsel Mary Frances Edmonds and Sarah Miller. Craig Rainey has served as general counsel of Williams since January of this year.
Gibson Dunn represented Williams earlier this year on its $2.5 billion acquisition of Marcellus Shale gas processor Caiman Eastern Midstream and also handled a $4.9 billion unsolicited bid for natural gas company Southern Union in 2011 that later fizzled. (Energy Transfer Equity eventually prevailed in its bid to buy Southern Union.)
The series of transactions between Chesapeake, Access Midstream, and Williams are expected to close by the end of the year.