Total E&P USA is set to exercise its preemption right to acquire Chesapeake’s 75% interests in the Barnett Shale operating area, which is jointly held by both the companies and located in North Texas.
The remaining 25% of the Barnett Assets is owned by Total since December 2009.
The preemption will allow Total to own and operate the assets completely.
As part of the transaction, the company will acquire around 215,000 net developed and undeveloped acres, wells, leases, minerals, buildings and properties.
Associated net production of these assets for this year is about 65,000 barrels of oil equivalent per day (boe/d).
Under the deal, Chesapeake will pay $334m to Williams, the gatherer and processer of 80% of the gas from the Barnett Assets, in a bid to terminate its agreement.
Total will supplement Chesapeake’s payment with $420m to Williams for a gas gathering agreement, in addition to $138m to be released from three midstream capacity reservation contracts.
Total E&P US president and CEO José Ignacio Sanz said: “As an operator, we look forward to working with all stakeholders, our leaseholders, the Dallas Fort Worth and other authorities, Williams and other midstream partners, and our customers.
"Increasing our stake in the Barnett shale supports Total’s global strategy to be a leader in natural gas.”
Subject to various conditions, including the receipt of third-party consents, the preemption and associated transactions are expected to close in the fourth quarter of this year.
Total also owns a 25% interest in the Chesapeake-operated Utica shale joint venture in Ohio, a 17% interest in the Tahiti field within the Gulf of Mexico, and a 33.3% interest in the Chinook field.
