Chesapeake Sells Utica Stake to Total SAJan. 3, 2012 6:46...

Chesapeake Sells Utica Stake to Total SA
Jan. 3, 2012 6:46 a.m.

YOUNGSTOWN, Ohio --A French oil giant, Total SA, has paid $2.32 billion to acquire a 25% stake in Chesapeake Energy Corp.'s vast holdings in Ohio's Utica shale play. The completion of the joint venture was announced this morning; the deal closed Dec. 30.

The sale involves 619,000 net acres in the liquids-rich area of the Utica shale and covers all or a portion of 10 counties in eastern Ohio, including Mahoning, Trumbull and Columbiana counties.

Approximately 542,000 net acres were contributed to the joint venture by Chesapeake and 77,000 net acres by Houston-based EnerVest Ltd., according to Chesapeake's announcement.

Analysts describe the $2.3 billion deal as evidence of how much and how fast foreign oil and gas companies are buying into the U.S. shale plays.

Chesapeake will receive $2.03 billion from the deal, EnerVest $290 million. Approximately $610 million was paid to Chesapeake in cash at closing and $1.42 billion will be paid in the form of a drilling and completion cost carry, which Chesapeake said it anticipates fully receiving by year-end 2014.

Said Chesapeake's CEO, Aubrey K. McClendon, in a prepared statement, "We believe that the Utica shale is a world-class asset with world-class returns and now we have a world-class partner to help develop the play more aggressively than we could have with our own resources. This Utica transaction is our seventh significant joint venture and in these seven JVs, Chesapeake has sold approximately 1.5 million net acres for total leasehold consideration of $14.8 billion while retaining 3.6 million net acres with an indicated value by the JV partners of $45.7 billion."

Published by The Business Journal, Youngstown, Ohio.
http://business-journal.com/chesapeake-sells-utica-stake-to-total-sa-p20694-1.htm