OKLAHOMA CITY, Jan. 4 (UPI) -- American shale gas giant Chesapeake Energy reached a deal to sell French supermajor Total a 25-percent stake in its upstream Barnett shale assets.
Chesapeake said the deal includes roughly 270,000 acres of leases in Barnett shale. Reserve estimates are listed at approximately 700 million cubic feet of natural gas equivalent per day.
Barnett shale covers an area of 5,000 square miles under the state of Texas.
The gas company said it plans to acquire more Barnett shale leases in the future. Total takes 25 percent of the new acreage until the terms of the current acquisition deal expire on Dec. 31, 2015.
Aubrey McClendon, the chief executive officer at Chesapeake, said Total approached the company on the acquisition of Barnett shale assets during the summer of 2009. Both companies have "worked diligently and thoughtfully" to develop an acquisition deal that was mutually attractive, he added.
Total pays $800 million to Chesapeake for the acquisition of the Barnett shale assets. The French supermajor also funds 60 percent of Chesapeake's drilling costs until it covers a $1.45 billion supplementary obligation.
Chesapeake expects regulatory approval of the joint venture by the end of January. Total should meet the drilling supplement by 2012, the company added.
