Other Property and Equipment

A summary of other property and equipment held for use and the useful lives thereof is as follows:



	December 31,						Useful
	2013			2012			Life
	($ in millions)						(in years)
Oilfield services equipment	$	2,192		$	2,130		3 - 15
Buildings and improvements	1,433			1,580			10 - 39
Natural gas compressors	368			505			3 - 20
Land	212			515			—
Other	1,190			1,178			2 - 20
Total other property and equipment, at cost	5,395			5,908
Less: accumulated depreciation	(1,584		)	(1,293		)
Total other property and equipment, net	$	3,811		$	4,615

Net Gains on Sales of Fixed Assets

A summary by asset class of (gains) or losses on sales of fixed assets for the years ended December 31, 2013, 2012 and 2011 is as follows:



	Years Ended December 31,
	2013			2012			2011
	($ in millions)
Gathering systems and treating plants	$	(326	)	$	(286	)	$	(440	)
Drilling rigs and equipment	2			10			1
Buildings and land	27			7			2
Other	(5		)	2			—
Total net gains on sales of fixed assets	$	(302	)	$	(267	)	$	(437	)

Gathering Systems and Treating Plants. In 2013, CMD sold its wholly owned midstream subsidiary, Mid-America Midstream Gas Services, L.L.C. (MAMGS), to SemGas, L.P. (SemGas), a wholly owned subsidiary of SemGroup Corporation, for net proceeds of approximately $306 million, subject to post-closing adjustments. We recorded a $141 million gain associated with this transaction. MAMGS owns certain gathering and processing assets located in the Mississippi Lime play, and the transaction with SemGas included a new long-term fixed-fee gathering and processing agreement covering acreage dedication areas in the Mississippi Lime play.

In 2013, CMD sold its wholly owned subsidiary, Granite Wash Midstream Gas Services, L.L.C. (GWMGS), to MarkWest Oklahoma Gas Company, L.L.C., a wholly owned subsidiary of MarkWest Energy Partners, L.P. (NYSE:MWE), for net proceeds of approximately $252 million, subject to post-closing adjustments. We recorded a $105 million gain associated with this transaction. GWMGS owns certain midstream assets in the Anadarko Basin that service the Granite Wash and Hogshooter formations. The transaction with MWE included new long-term fixed-fee agreements for gas gathering, compression, treating and processing services.

In 2013, we sold our interest in certain gathering system assets in Pennsylvania to Western Gas Partners, LP (NYSE:WES) for proceeds of approximately $134 million. We recorded a $55 million gain associated with this transaction.

In 2012, CMD sold its wholly owned subsidiary, CMO, which held a majority of our midstream business, to ACMP for total consideration of $2.16 billion in cash. In connection with the sale, Chesapeake entered into new long-term agreements in which ACMP agreed to perform certain natural gas gathering and related services for us within specified acreage dedication areas in exchange for (i) cost-of-service based fees redetermined annually beginning January 2014 in the Niobrara and Marcellus shale plays, (ii) cost-of-service based fees redetermined annually beginning October 2013 for the wet gas gathering systems and January 2014 for the dry gas gathering systems in the Utica Shale play, (iii) tiered fees based on volumes delivered relative to scheduled volumes through 2015 and thereafter cost-of-service based fees redetermined annually in the Eagle Ford Shale play, and (iv) annual minimum volume commitments and a fixed fee per mmbtu of natural gas gathered, subject to an annual 2.5% rate escalation, through 2017 and thereafter tiered fees based on volumes delivered relative to scheduled volumes in the Haynesville Shale play. We recorded a $289 million gain associated with this transaction.

In 2012, we sold our oil gathering business and related assets in the Eagle Ford Shale to Plains Pipeline, L.P. for cash proceeds of approximately $115 million. Subsequent to December 31, 2012, we received an additional $10 million of proceeds upon satisfaction of a certain closing contingency. We recorded a $3 million gain associated with this transaction. In connection with the sale, we entered into new gathering and transportation agreements covering acreage dedication areas.

In 2011, CMD sold its wholly owned subsidiary, Appalachia Midstream Services, L.L.C. (AMS), which held substantially all of our Marcellus Shale midstream assets, to ACMP for total consideration of $884 million and recorded a gain of $439 million. We, and other producers in the area, have 15-year cost of service gathering and compression agreements with AMS that include acreage dedications and an annual fee redetermination.

Buildings and Land. In 2013, we recorded net losses of $27 million on sales of buildings and land located primarily in our Barnett Shale operating area.

Acquisition of Bronco Drilling

In June 2011, we acquired Bronco Drilling Company, Inc., a publicly traded contract land drilling services company, for an aggregate purchase price of approximately $339 million, or $11.00 per share of Bronco common stock. The acquisition was accounted for as a business combination which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair values.

Assets and Liabilities Held for Sale

In 2013, we determined we would sell certain of our buildings and land (other than our core campus) in the Oklahoma City area. In addition, as of December 31, 2013 we were continuing to pursue the sale of various land and buildings located in the Fort Worth, Texas area. The land and buildings in both the Oklahoma City and Fort Worth areas are reported under our other segment. We are also pursuing the sale of various other property and equipment, including certain drilling rigs, compressors and gathering systems. The drilling rigs are reported under our oilfield services operating segment, and the compressors and gathering systems are reported under our marketing, gathering and compression operating segment. These assets are being actively marketed, and we believe it is probable they will be sold over the next 12 months. As a result, these assets qualified as held for sale as of December 31, 2013. Natural gas and oil properties that we intend to sell are not presented as held for sale pursuant to the rules governing full cost accounting for oil and gas properties. A summary of the assets and liabilities held for sale on our consolidated balance sheets as of December 31, 2013 and 2012 is detailed below.



	December 31,
	2013		2012
	($ in millions)
Accounts receivable	$	—	$	4
Current assets held for sale	$	—	$	4

Natural gas gathering systems and treating plants, net of accumulated depreciation	$	11	$	352
Oilfield services equipment, net of accumulated depreciation	29		27
Compressors, net of accumulated depreciation	285		—
Buildings and land, net of accumulated depreciation	405		255
Property and equipment held for sale, net	$	730	$	634

Accounts payable	$	—	$	4
Accrued liabilities	—		17
Current liabilities held for sale	$	—	$	21