Chesapeake CEO Aubrey McClendon told a group of analysts at...

Chesapeake CEO Aubrey McClendon told a group of analysts at company headquarters that his company plans to become one of the five biggest oil producers in the US very soon.

He said that Chesapeake has already leased 10 billion to 15 billion barrels of potential reserves in shale oil plays and will use the same leasing and financing techniques it used to unlocked huge volumes of natural gas in shale formations.

Were going to take what we learned in unconventional gas and apply it to unconventional oil, he said.

He told analysts to expect a new joint venture early next year in 2011 involving Chesapeakes Niobrara shale oil position in Wyoming and Colorado, with a second partnership by the middle of the year in a shale oil play that he declined to name.

The fact CHK have started drilling on the acreage purchased from SSN you would expect the knowledge and expertise gained from those wells would make them the best possible company to do a JV with.

I know TB will do the best possible deal but my money is on CHK they have all the resources and equipment necessary and a proven track record to develop areas at a rapid pace.

It will be the detail of the JV that will interest me, the main question will be what percentage SSN may have to give up of their 100% WI on the remaining 8497 acreage.

SSN has 17000 acres and believe a possible 106 wells for this location if 160 acres spacing is approved.

CHK has 24000 acres of which SSN would receive a 3.8% royalty on 150 wells, if you use the same principle.

As you can see, with the possibility of 256 wells to develop the potential net income to SSN is huge, just in their Niobrara play.

Good luck to all holders !!