Chesapeake Energy (CHK) has built a sizable acreage position in almost all the major shale plays in North America. This is a summary of its position in the Fayetteville Shale as of 3/31/2009.
Acreage - 440,000
Drilling Spacing - 80
Drilling Locations - 4100
Proved Reserves -809 Bcfe
Current Daily Production - 200 mmcfe
Chesapeake Energy said that production will reach 280 mmcfe by the end of 2009.
Chesapeake Energy entered into a joint venture with BP Inc. (BP) in Sept 2008 in its acreage in the Fayetteville Shale. BP acquired a 25% interest in the acreage for $1.9 billion. BP paid $1.1 billion when the deal was announced and will pay another $800 million by funding Chesapeake Energy's share of capital expenditures in 2009.
Chesapeake Energy plans on spending $500 million in 2009 on capital expenditures, and because of the structure of the joint venture, virtually all of it will be funded by BP. The company will average 20 operated rigs in the Fayetteville Shale in 2009.
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