Total, Chesapeake to Buy Stake in Barnett Shale

3 January 2010 (Last Updated January 3rd, 2010 18:30)

Total E&P USA has entered into a $2.25bn joint venture with Chesapeake Exploration for the acquisition of a 25% stake in the Barnett Shale gas development, in the USA. The Barnett portfolio in Texas produces nearly 700 million cubic feet of natural gas a day, spread across 300,0

Total E&P USA has entered into a $2.25bn joint venture with Chesapeake Exploration for the acquisition of a 25% stake in the Barnett Shale gas development, in the USA.

The Barnett portfolio in Texas produces nearly 700 million cubic feet of natural gas a day, spread across 300,000 acres of leasehold.

Total's stake in current daily production of natural gas will amount to 175 million cubic feet (30,000 barrels of oil equivalent) with its share expected to increase to more than 250 million cubic feet per day in the coming years.

Total's proven reserves share will be 0.75 trillion cubic feet of gas (130 million barrels of oil equivalent) and 1.6 trillion cubic feet (270 million barrels of oil equivalent) of additional unproven reserves.

The deal is subject to closing conditions, which will be completed by the end of this month, after which Chesapeake will pay $800m to buy the assets.

According to the agreement, Total will pay $1.45bn over a six-year period. Total will then be entitled to purchase a 25% stake in any new acreage that Chesapeake acquires in the Barnett Shale play.

Both companies also plan to research other North American shale gas opportunities.