Total E&P USA said it is exercising its preemption right to acquire Chesapeake Energy Corp.’s 75% interest in the jointly held Barnett shale operating properties near Fort Worth. Total already owns the remaining 25% and will become the operator.
Properties include 215,000 net developed and undeveloped acres and 65,000 boe/d in production. Chesapeake of Oklahoma City previously announced its plans to exit the Barnett (OGJ Online, Aug. 22, 2016).
Drilling for new gas wells has diminished in the Barnett shale in recent years. Baker Hughes Inc. reported 4 rigs drilling in the Barnett during August.
Total said the preemption and associated transactions are subject to numerous conditions, including third-party consents. Closing is expected in the fourth quarter.
Chesapeake will pay $334 million to Williams, the gatherer and processer of 80% of the gas from the Barnett shale properties. Chesapeake is terminating its gathering agreement.
Total will supplement Chesapeake’s payment with $420 million to Williams for a fully restructured, competitive gas-gathering agreement.
In addition, Total will pay $138 million to be released from three midstream capacity reservation contracts.
Total also holds a 25% interest in the Chesapeake-operated Utica shale joint venture in Ohio. In the Gulf of Mexico, Total holds a 17% interest in Tahiti field and a 33.3% interest in Chinook field. Additionally, Total and Cobalt International Energy plan to explore for oil in the deepwater Gulf of Mexico.
Contact Paula Dittrick at [email protected].
