Chesapeake, RKI E&P agree on Powder River acreage exchange

Chesapeake Energy Corp. and RKI Exploration & Production LLC (RKI), both of Oklahoma City, have agreed to exchange nonoperated interests in 440,000 gross acres in the Powder River basin in southeastern Wyoming.

The transaction, expected to close in August, calls for Chesapeake to convey to RKI 137,000 net acres and its interest in 67 gross wells, with an average working interest of 22% in the RKI-operated northern portion of the basin. Chesapeake will also pay RKI $450 million in cash.

RKI will convey to Chesapeake 203,000 net acres and its interest in 186 gross wells, with an average working interest of 48% in the Chesapeake-operated southern portion of the basin.

The deal consolidates Chesapeake’s Powder River acreage in the southern area, which the company says contains multiple stacked oil pay zones with potentially recoverable gross resource estimated to be more than 2 billion boe.

Chesapeake will operate almost 100% of its 388,000 net acres in the basin, and will hold 79% average working interest. The company currently holds 322,000 net acres with 38% average working interest.

The company in May agreed to divest a portion of its noncore Powder River acreage (OGJ Online May 16, 2014).

Powder River activity

Chesapeake recently drilled a 9,600-ft lateral well in the Niobrara play in 32 days at a cost of $5 million compared with 2013 vintage Niobrara wells with an average lateral length of 5,300 ft and average cost of $6.6 million.

The Sussex I test well, placed online in January, has produced 232,000 boe in 150 production days and continues to produce more than 1,500 boe/d.

The Sussex III, Chesapeake’s recent delineation well that lies 20 miles north of Sussex I, produced at an initial 24-hr average rate of more than 1,000 boe/d, 85% of which is oil, substantially derisking the northern end of the Sussex field estimated at 20 miles long by 5 miles wide.

The company estimates the Sussex formation consists of more than 75% oil with API 40-48° gravity.

“Excellent results to date from the Niobrara and Sussex formations, coupled with additional stacked pay potential in other Upper Cretaceous sands as well as the Frontier and Mowry formations, demonstrate the potential of the Powder River basin to be a major oil growth engine for the company,” commented Doug Lawler, Chesapeake chief executive officer.

Related Articles

Total joins global climate initiatives

11/20/2014 Total SA, in what it describes as a consolidation of its efforts to address climate change, will support initiatives of the United Nations Global C...

IHS: ‘Tight-oil test’ under way in US amid lower oil prices

11/20/2014 The vast majority of potential US tight-oil production growth remains economical in the current crude oil price environment, according to a recent ...

Apache to sell Louisiana, Anadarko assets for $1.4 billion

11/20/2014 Houston independent Apache Corp. has agreed to sell noncore southern Louisiana and certain Anadarko basin assets in two separate deals for a combin...

AFPM: Oregon’s proposed low-carbon fuel standard unconstitutional

11/20/2014 Oregon’s proposed low-carbon fuel standards (LCFS) program is unconstitutional, the American Fuel & Petrochemical Manufacturers said in comment...

MARKET WATCH: Crude oil futures prices rangebound

11/20/2014 US light, sweet crude oil prices remained below $75/bbl Nov. 19 on the New York market, while analysts and traders focused on the upcoming meeting ...

Bids spike in Northern Alaska lease sales

11/19/2014 Alaska’s Division of Oil & Gas received 356 bids on 298 tracts in its 2014 Northern Alaska area-wide lease sales, trumping the 92 bids received...

NOIA, API studies list benefits of more federal OCS leasing

11/19/2014 Offshore oil and gas leasing in the eastern Gulf of Mexico and on the US Atlantic and Pacific coasts could create more than 838,000 American jobs a...

Freeport LNG nears construction phase

11/19/2014 Freeport LNG Expansion LP expects later this month to close on financing and begin construction on the first two trains of its natural gas liquefac...

Petrobras initiates start-up of units at Abreu e Lima refinery

11/19/2014 Petroleo Brasileiro SA (Petrobras) has received permission to commission units at its Abreu e Lima refinery (Rnest) at the port of Suape, near Reci...

White Papers

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Increase Equipment Uptime Through Robust Enterprise Asset Management

Whether you operate in the Upstream Drilling and Exploration sector, the Midstream distribution sector...
Sponsored by

Continuous Improvement for Maintenance with Robust Reporting and Analytics

You should have real-time, anywhere access to more relevant and comprehensive data to help manage and ...
Sponsored by

Enterprise Asset Management Solution for Movable Assets in the Oil & Gas Industry

Drilling and exploration companies face several challenges in effectively managing assets both offshor...
Sponsored by

Supporting HSE Needs for Oil & Gas Through Effective Asset Management Practices

The Oil & Gas industry is constantly being challenged to find, extract and deliver cheaper an...
Sponsored by

Sesam for subsea design analysis

With the exponential growth in the subsea sector, a new set of challenges now face the industry. Mostl...
Sponsored by

Is the gas delivery system you’re looking at able to meet your power generation needs: a hydraulic engineer’s perspective

The hydraulic characteristics, and system response to demands and supplies, of natural gas pipelines a...
Sponsored by

Available Webcasts



Optimizing your asset management practices to mitigate the effects of a down market

When Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST



On Demand

Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected