Chesapeake Energy Corp. has a new partner in developing Ohio's Utica shale: a subsidiary of a French energy giant.
Total E&P USA Inc., a subsidiary of Total SA, Frances's largest oil company, will pay $2.32 billion for a 25 percent interest in 619,000 acres of eastern Ohio with liquids-rich Utica shale.
The joint venture was announced today.
The deal covers 542,000 acres leased by Oklahoma-based Chesapeake Energy and 77,000 acres leased by Texas-based EnerVest Ltd.
The deal covers land in 10 counties in east-central Ohio.
The agreement calls for Total to pay $2.03 billion to Chesapeake and $290 million to EnerVest.
Chesapeake got $610 million when the deal closed and will get $1.42 billion by Dec. 31, 2014, to cover drilling and completion costs.
Cheasapeake will handle all leasing, drilling, completing, operating and marketing activities for the project.
The joint venture is the seventh completed by Chesapeake Energy since 2008. It is the second between Chesapeake and Total. They partnered in 2010 on a project in the Barnett shale in Texas.
The agreement will enable Chesapeake to proceed with extensive drilling on its 1.5 million leased acres in eastern Ohio.
Chesapeake had said in early November it was working on a joint $2.25 billion venture with an unidentified company.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
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Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
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