Chesapeake Energy Corporation announced it has agreed to sell all of the company’s interests in approximately 487,000 net acres of leasehold and producing natural gas properties in the Fayetteville Shale play in central Arkansas to BHP Billiton Petroleum, a wholly owned subsidiary of BHP Billiton Limited, for $4.75 billion in cash before certain deductions and standard closing adjustments.
The transaction includes existing net production of approximately 415 million cubic feet of natural gas equivalent per day and midstream assets with approximately 420 miles of pipeline. As part of the transaction, Chesapeake has agreed to provide essential services for up to one year for BHP Billiton’s Fayetteville properties for an agreed-upon fee. The transaction is expected to close in the first half of 2011.
Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented , “ We are pleased to announce the sale of our Fayetteville Shale assets to BHP Billiton and quickly achieve substantial progress in implementing the debt reduction targets of our previously announced 25/25 Plan. BHP Billiton is a premier global company and we look forward to working with BHP Billiton’s management to ensure a smooth transition of operations.”
“The Fayetteville shale is a world-class onshore natural gas resource,” said J. Michael Yeager, Chief Executive of BHP Billiton Petroleum . “The purchase of this long-life field immediately adds over 10 trillion cubic feet of gas resources to our portfolio and is consistent with our strategy of investing in large, low cost assets with significant volume growth for future development.”
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Source: Chesapeake, February 22, 2011;