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| Total signs an agreement to enter into a joint venture with Chesapeake and to acquire 25% of Chesapeake Barnett Shale gas portfolio | |||
| 4 Jan 2010
: Total announces that its subsidiary, Total E&P USA, Inc., has signed on December, 30, 2009 an agreement to enter into a joint venture with United States based Chesapeake Exploration, L.L.C., a subsidiary of Chesapeake Energy Corporation (NYSE:CHK) of Oklahoma City, Oklahoma, whereby Total acquires a 25% share in Chesapeake’s Barnett shale gas* portfolio located in the State of Texas. The assets have current net daily production of approximately 700 million cubic feet of natural gas and include approximately 300,000 net acres of leasehold, of which 90% are in the core area of the Barnett play. Total’s share of current production will be approximately 175 million cubic feet per day of natural gas (30 thousand barrels of oil equivalent), with forecast growth increasing Total’s share of production to over 250 million cubic feet per day of natural gas in future years. Total’s share of proven reserves will be approximately 0.75 trillion cubic feet of gas (130 million barrels of oil equivalent), with additional unproved reserves of approximately 1.6 trillion cubic feet (270 million barrels of oil equivalent). The transaction, effective as of October 1st, 2009, is subject to closing conditions which are planned to be completed by end of January 2010. Total will then pay Chesapeake a consideration of USD 800 million in cash for acquiring these assets. Total will also be committed to pay a further maximum of USD 1.45 billion over a maximum period of 6 years in the form of a 60% carry of Chesapeake future capital expenditures on drilling and completion of wells within the framework of the joint venture. As a result of the transaction, Total will also have the right to acquire a 25% share in any new acreage which will be acquired by Chesapeake in the Barnett Shale play. Additionally, Total and Chesapeake have agreed to jointly study certain other North American shale gas opportunities together. |
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