By OGJ editors
HOUSTON, June 6 -- Chesapeake Energy Corp., Oklahoma City, has agreed to acquire Barnett shale assets totaling 67,000 acres containing 1.5 tcf of proved and unproved reserves and 30 MMcfd of natural gas production for $932 million. The transactions are expected to close July 31.
For $845 million in cash, Chesapeake acquired 39,000 acres of Barnett shale leases, 30 MMcfd of gas production, and $55 million in midstream gas assets from Four Sevens Oil Co. Ltd. and Sinclair Oil Corp.
Of these leases, 26,000 acres are in Johnson and Tarrant counties, Tex., where Chesapeake has identified 500 potential drillsites. Chesapeake expects to increase gas production from the Four Sevens-Sinclair assets to at least 45-50 MMcfd by yearend and to 80-100 MMcfd by yearend 2007.
In transactions with other sellers, Chesapeake also paid $87 million for 28,000 acres, primarily in Johnson and Tarrant counties, which will provide 400 additional drillsites and estimated unproved reserves of 650 bcf of gas.
Chesapeake plans to increase its current Barnett shale drilling rig count to 24 by yearend from 12 and to drill 350-400 Barnett shale wells/year.
Texas, Arkansas deals
In separate transactions, Chesapeake has acquired or agreed to acquire 150,000 acres in Brewster, Pecos, and Reeves counties in the West Texas Barnett and Woodford shale plays and has completed its first commercial production from the Barnett shale in West Texas and the Fayetteville shale in Arkansas
Chesapeake will conduct a 3D seismic and drilling program to determine the potential of these assets. In this West Texas area, the Barnett shale is 400-950 ft thick (compared with 100-400 ft in the Fort Worth basin) and the deeper Woodford shale is 400-500 ft thick (compared with 150-250 ft thick in southeastern Oklahoma).
