Total to buy Chesapeake shale stake for $2.25 billion
January 5, 2010
Bloomberg reports that Total SA has agreed to buy a stake in Chesapeake Energy Corp.’s assets in the biggest U.S. natural-gas field for as much as $2.25 billion. Total will pay $800 million for the 25 percent stake and as much as $1.45 billion over as long as six years by funding 60 percent of Chesapeake’s costs in the Barnett Shale formation of North Texas, the companies said in separate statements. Total has unconventional gas projects in South America, Africa and China. The Barnett Shale is the most productive U.S. gas field and accounted for 52 percent of Chesapeake’s third-quarter output. It was the first geological formation where improved technology enabled producers to bore sideways through thousands of feet of rock and fracture it with a mixture of water, sand and chemicals to make gas flow. Chesapeake said assets going into the joint venture with Total include about 270,000 net acres of leaseholds in the Barnett, 700 million cubic feet of daily gas output and reserves equivalent to 3 trillion cubic feet of gas. Total estimated the expanse at about 300,000 net acres.