Frac Tech Announces Sale of Majority Interest to Investor Group

CISCO, Texas--()--A consortium of investors, including Maju Investments (Mauritius) Pte Ltd., a wholly-owned investment holding company of Temasek Holdings (Private) Limited (Temasek), and RRJ Capital, has reached an agreement to purchase Frac Tech Holdings, LLC, the majority shareholder of Frac Tech Services, LLC (“Frac Tech”).

At closing, the members of the consortium will own 70 percent of Frac Tech, while Chesapeake Energy Corporation (NYSE:CHK) will receive a cash distribution and will increase its ownership to 30 percent from its current ownership of approximately 26 percent.

Frac Tech’s President and Chief Financial Officer Marc Rowland commented, “We are pleased to join forces with our friends at Temasek and RRJ Capital to recapitalize Frac Tech. We believe this partnership will allow us to further drive our growth strategy and to continue delivering quality service to our customers, based on the unique relationships and opportunities introduced by our partners.”

The consortium has received a $1.7 billion debt financing commitment from its financial advisors. The company estimates consolidated EBITDA for the 12 months ending March 31, 2011, was approximately $685 million, and that expected EBITDA for the full year 2011 will be approximately $1.1 billion to $1.15 billion.

Frac Tech is the fourth largest provider of well stimulation services to the U.S. exploration and production industry, with approximately 1.1 million horsepower currently in service and plans for 1.6 million in horsepower in service by the end of 2011.

The transaction is expected to close in second quarter 2011 and is subject to customary closing conditions.

Bank of America Merrill Lynch and Citigroup are serving as the financial advisors to Chesapeake, Temasek and RRJ Capital. Commercial Law Group P.C. and Wachtell, Lipton, Rosen & Katz are acting as legal advisors to Chesapeake Energy. Jones Day is acting as legal advisor to Temasek.

About Frac Tech Services

Frac Tec Services (www.fractech.net) is an oilfield service company providing well stimulation services throughout the United States. Frac Tech began as a small, family-owned business in 2002, and has grown to be one of the largest well stimulation companies in the United States, with major locations in Texas, Oklahoma, Louisiana, New Mexico, Pennsylvania, North Dakota, and Utah.

Contacts

Frac Tech Services
Pam Percival, 817-862-2068
Director of Corporate Communications
ppercival@fractech.net

Release Summary

A consortium of investors has reached an agreement to purchase Frac Tech Holdings, the majority shareholder of Frac Tech Services.

Contacts

Frac Tech Services
Pam Percival, 817-862-2068
Director of Corporate Communications
ppercival@fractech.net