BP, Chesapeake ink $1.9B deal in Fayetteville Shale

September 2008 - Chesapeake Energy Corp. and BP America intend to form a joint venture whereby BP will acquire a 25% interest in Chesapeake's Fayetteville Shale assets in Arkansas for $1.9 billion.

The assets have current daily net production of nearly 180 million cubic feet of natural gas equivalent and include approximately 540,000 net acres of leasehold which the companies believe could support the drilling of up to 6,700 future horizontal wells.

BP will own roughly 135,000 net acres of this leasehold and Chesapeake will own approximately 405,000 net acres.

BP will pay $1.1 billion in cash at closing and will pay a further $800 million during the remainder of 2008 and in 2009 by funding 100% of Chesapeake's 75% share of drilling and completion expenditures until the $800 million obligation has been funded. Chesapeake plans to continue acquiring leasehold in the Fayetteville Shale play and BP will have the right to a 25% participation in any such additional leasehold.

Aubrey K. McClendon, Chesapeake's CEO, commented, "The PXP Haynesville Shale joint venture and the BP Fayetteville Shale joint venture together will pay for approximately $2.5 billion of Chesapeake's drilling and completion expenditures currently planned for the second half of 2008 through 2010.

As previously announced, we are also pursuing a similar transaction involving our Marcellus Shale assets with others in the industry that we hope to complete by year-end 2008."

 

Related Articles

Empire O&G appoints Aitken as CEO

04/01/2014 Empire Oil & Gas NL has appointed Ken Aitken as chief executive. Aitken is experienced in Western Australia’s oil and gas industry, in particular the Perth Basin, which hosts Empire’s assets.

Empire O&G withdraws from EP 437 in Perth Basin

04/01/2014 Empire Oil & Gas reports that its wholly owned subsidiary, Empire Oil Company (WA) Ltd., will withdraw from permit EP 437 in onshore Perth Basin, Western Australia, by agreement with its joint ...

Tap Oil and partners to drill in Myanmar Block M07

03/27/2014 Tap Oil Ltd. reported has been notified by the Myanmar Ministry of Energy (MOE) of the successful award of a production sharing contract for shallow-water Block M07 in the Moattama Basin, offshore ...

Cooper Energy reports new gas play discovered in South Australia

03/26/2014

Cooper Energy Ltd. has identifed the potential for a new deep basin gas play in the Penola Trough of South Australia.

WDS-CPECC JV signs contract with Arrow Energy

03/24/2014 WDS Ltd.'s Energy Division, in a joint venture with China Petroleum Engineering & Construction Corp., has signed a field development and operations construction master services agreement with A...

More Oil & Gas Financial Articles

Empire O&G appoints Aitken as CEO

Tue, Apr 1, 2014

Empire Oil & Gas NL has appointed Ken Aitken as chief executive. Aitken is experienced in Western Australia’s oil and gas industry, in particular the Perth Basin, which hosts Empire’s assets.

Empire O&G withdraws from EP 437 in Perth Basin

Tue, Apr 1, 2014

Empire Oil & Gas reports that its wholly owned subsidiary, Empire Oil Company (WA) Ltd., will withdraw from permit EP 437 in onshore Perth Basin, Western Australia, by agreement with its joint venture partners in the permit, Key Petroleum (Australia) Pty. Ltd., a wholly owned subsidiary of Key Petroleum Ltd. and Caracal Exploration Pty. Ltd.

Tap Oil and partners to drill in Myanmar Block M07

Thu, Mar 27, 2014

Tap Oil Ltd. reported has been notified by the Myanmar Ministry of Energy (MOE) of the successful award of a production sharing contract for shallow-water Block M07 in the Moattama Basin, offshore Myanmar.

Cooper Energy reports new gas play discovered in South Australia

Wed, Mar 26, 2014

Cooper Energy Ltd. has identifed the potential for a new deep basin gas play in the Penola Trough of South Australia.

WDS-CPECC JV signs contract with Arrow Energy

Mon, Mar 24, 2014

WDS Ltd.'s Energy Division, in a joint venture with China Petroleum Engineering & Construction Corp., has signed a field development and operations construction master services agreement with Arrow Energy for Arrow’s domestic gas requirements in Australia.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ