China’s state-owned energy company, China Petroleum & Chemical Corp. or Sinopec (SNP) is mulling over acquiring assets worth billions of dollars from the cash-strapped U.S. natural gas producer Chesapeake Energy Corporation (CHK).

Per a report from ‘Financial Times’, Sinopec’s top management visited Oklahoma, U.S. to carry out due diligence in connection with the Chesapeake assets. The details regarding the assets, which have raised Sinopec’s interest, have not been revealed.

In the backdrop of falling gas prices, the U.S. based gas giant has been on a spree to divest assets valued at about $11.5 billion, as it is struggling to fund its capital budget amid diminishing cash flows.

The assets which have been put up for sale include – the Mississippi Lime in Oklahoma, the Utica Shale in Ohio and the Permian in West Texas and New Mexico. Among these, the 1.5 million acres of Permian assets are considered to be the most reputed area for oil development in the U.S. The analysts have estimated this land alone to bring in over $6 billion through sale.

Earlier in June 2012, Chesapeake had struck an asset sale deal with private equity firm Global Infrastructure Partners related to its pipeline properties for a total consideration of $4 billion in cash. Further, the sale of the Permian acreage will greatly help Chesapeake in reducing its debt burden.

Meanwhile, Sinopec is in pursuit of opportunities to augment its earnings by expanding its upstream segment through mergers and acquisitions. The company is in the process of restructuring to accommodate increased activities worldwide. Sinopec has been slower in entering the U.S. compared to its Chinese rival CNOOC Ltd. (CEO). Earlier this year, Sinopec inked a $2.5 billion deal with U.S. oil and natural gas company Devon Energy Corporation (DVN).

Both Chesapeake and Sinopec hold a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months.

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