Chesapeake Energy (CHK) announced that CNOOC Limited will purchase a 33.3% interest in the company’s properties in South Texas that are prospective for the Eagle Ford Shale.
CNOOC Limited will pay $1.08 billion at the closing of the deal and an additional $1.08 billion through a drilling carry of 75% of the future drilling and completion costs of Chesapeake Energy.
Chesapeake Energy has 600,000 net acres in the Eagle Ford Shale, located mostly in Webb, Dimmitt, LaSalle, Zavala, Frio and McMullen counties. The company estimates that 85% of its acreage is in the oil window, and 15% is in the wet gas window of the Eagle Ford Shale.
Chesapeake Energy said that due to the deal, the company would accelerate development of the Eagle Ford Shale, and increase its rig count as follows:
Current – 10 rigs
End of 2010 – 12 rigs
End of 2011 – 31 rigs
End of 2012 – 40 rigs
Chesapeake Energy said that the company would have 900 wells drilled by the end of 2012, and that its production would peak at 400,000 to 500,000 barrels of oil equivalent per day “in the next decade.”
