Total buys 25pc Chesapeake EnerVest Utica shale play in Ohio

Total buys 25pc of Chesapeake and EnerVest Utica shale play in Ohio

1:14 AM, 3rd January 2012
Total buys 25pc of Chesapeake and EnerVest Utica shale play in Ohio
Yves-Louis Darricarrere, President, Exploration & Production, Total.

 

PARIS, FRANCE: Total’s subsidiary, Total E&P USA, will form a joint venture with Chesapeake Exploration LLC, a Chesapeake Energy subsidiary and affiliates of its partner EnerVest Ltd. Total acquires 25 per cent share in Chesapeake’s and EnerVest’s liquids-rich area of the Utica shale play located across 10 counties on the eastern side of Ohio, US. The transaction is effective as of November 1, 2011.

Total has paid Chesapeake and EnerVest about $700 million in cash for acquiring these assets. Total will also be committed to pay additional amounts up to $1.63 billion over a maximum period of 7 years in the form of a 60 per cent carry of Chesapeake and EnerVest’s future capital expenditures on drilling and completion of wells within the joint venture.

“The joint venture is consistent with our strategy to develop positions in unconventional plays with large potential and in this case, with value predominantly linked to oil price. This JV will provide us with a material position in a valuable long-term resource base under attractive terms and with a top-class operator,” said Yves-Louis Darricarrere, President, Exploration & Production, Total.

The JV covers approximately 619,000 net acre, Chesapeake with 542,000 net acre and 77,000 net acre of EnerVest. Total will acquire 25 per cent share from each of Chesapeake and EnerVest, giving a total of 155,000 net acre. As a result of the transaction, Total will also acquire a 25 per cent share in any new acreage which will be acquired by Chesapeake in the Utica shale area. Additionally, Total, Chesapeake and EnerVest will jointly develop construction of necessary midstream facilities to export production from this acreage.

(C) WOC News

 

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