Total enters jv with US-based Chesapeake, buys into shale gas

04 January 2010 21:18  [Source: ICIS news]

HOUSTON (ICIS news)--A US subsidiary of France-based energy giant Total announced on Monday that it would enter a joint venture (jv) with a subsidiary of US-based Chesapeake Energy, with Total acquiring a stake in a key US natural gas field.

Total E&P USA signed an agreement in which it will pay $800m (€560m) in cash and an additional $1.45bn by funding 60% of Chesapeake's share of drilling and completion expenditures.

For that, Total will receive a 25% interest in Chesapeake’s upstream Barnett Shale assets. The Barnett Shale is a natural gas field located in north Texas.

Chesapeake’s Barnett assets have a current production rate of approximately 700MMBtu/day and include 300,000 acres of leasehold. Total’s share of current production will be approximately 175MMBtu/day of natural gas.

The deal, effective as of 1 October 2009, is subject to regulatory approval and expected to be completed by the end of January, according to a press statement.

($1 = €0.70)

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By: Steven McGinn
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