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Chesapeake strikes $1B deal with China's Sinopec

by Jay F. Marks Published: February 25, 2013

Chesapeake Energy Corp. announced Monday that it is selling half of its acreage in northern Oklahoma’s oil-rich Mississippi Lime play to China’s Sinopec International Petroleum Exploration and Production Corp. for more than $1 billion.

Sinopec already has an interest in the area, thanks to last year’s $2.5 billion deal with another Oklahoma City oil and natural gas company, Devon Energy Corp.

Chesapeake will sell Sinopec half of its 850,000 acres in the play for $1.02 billion, the company announced Monday.

The two companies will split future exploration and development costs for that acreage, with Chesapeake serving as operator.

 “We are excited to announce the execution of our Mississippi Lime joint venture with Sinopec, which moves us further along in achieving our asset sales goals and secures an excellent partner to share the capital costs required to actively develop this very large, liquids-rich resource play,” said Steven C. Dixon, Chesapeake’s chief operating officer.

Chesapeake has been selling assets since last year to close a funding gap between its income and operating costs.

The company, which is facing life without iconic founder Aubrey McClendon, sold more than $11 billion worth of assets to avert a cash crunch last year, with plans to raise as much as $7 billion that way in 2013.

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by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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