Total signs $2.25 billion shale gas deal with Chesapeake Energy of US
04 Jan 2010
French energy giant and Europe's third-largest oil producer Total is entering the US non-conventional energy market with a $2.25 billion deal with Chesapeake Energy Corporation, under which it will acquire a 25 per cent stake in the latter's shale gas portfolio.
Courbevoie, Paris-based Total's subsidiary, Total E&P USA, Inc, has signed an agreement on 30 December 2009 to enter into a joint venture with Oklahoma City, Oklahoma-based Chesapeake Exploration, a subsidiary of Chesapeake Energy Corporation, for the acquisition.
Chesapeake's Barnett shale gas portfolio is located in the State of Texas.
With 2008 revenue of €179.98 billion.
Total will pay Chesapeake $800 million in cash for acquiring the assets and a further $1.45 billion over a period of 6 years to fund 60 per cent of Chesapeake's future capital expenditures on drilling and completion of wells within the framework of the joint venture.
Total will also have the right to acquire a 25 per cent share in any new acreage, which will be acquired by Chesapeake in the Barnett Shale assets.
