WASHINGTON (dpa-AFX) - Chesapeake Energy Corp. (CHK) Monday unveiled its new $1.0 billion venture capital fund, Chesapeake NG Ventures Corp., which will be dedicated to invest in companies that will replace the use of gasoline derived mainly from OPEC oil with domestic oil and natural gas.
In order to fund this effort, Chesapeake will redirect nearly 1-2% of its forecast annual drilling budget away from efforts to increase natural gas supply toward projects that will instead stimulate increased natural gas demand. Over the next 10 years, the company anticipates committing at least $1.0 billion to venture initiatives.
As the fund's initial investment, the company has agreed to invest $150 million in newly issued convertible debt of Clean Energy Fuels Corp. (CLNE), based in Seal Beach, California.
Chesapeake will also invest $155 million in a 50 percent ownership stake in Sundrop Fuels Inc., a privately held cellulosic biofuels company based in Louisville, Colorado.
Sundrop plans to build a plant, which is expected to produce 40 million gallons of gasoline from natural gas and waste cellulosic material.
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