By OGJ editors
HOUSTON, Dec. 9 -- Chesapeake Energy Corp. of Oklahoma City signed an agreement to acquire US Midcontinent natural gas assets for $300 million through the acquisition of a wholly owned subsidiary of Tulsa-based Oneok Inc.
Chesapeake said that the assets being acquired hold 200 bcfe of proved reserves (94% of which is gas), 60 bcfe of probable and possible reserves, and produce 47 MMcfed of gas. The proved reserves have a reserves-to-production ratio of 11 years, Chesapeake said, and are 88% proved developed.
Chesapeake expects the transaction to close Jan. 31.
Included in the sale are Oneok's interests in several fields, including South Panola, Red Oak, Wilburton, Brooken, and Quinton in the Arkoma basin and Hugoton, Watonga-Chickasha, Carpenter, Strong City, Clinton, Arapaho, Morewood, Thomas, Eakly, Verden, Sahara, Bradley, Golden Trend, and Springer in the Anadarko basin. Chesapeake said that 87% of the assets being acquired are within townships in which it already holds properties.
Chesapeake said the acquisition will increase the company's proved reserves to nearly 2.5 tcfe of gas and its current production to more than 565 MMcfed of gas.
"Based on the results achieved from our previous acquisitions in the Midcontinent, we expect to substantially increase the value of Oneok's reserves through additional drilling, lower administrative costs, and reduced operating costs," the company said.
