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Chesapeake Energy selling Oklahoma acreage to Chinese company

Chesapeake Energy Corp. has struck a $1.02 billion joint venture with a Chinese oil company for a stake of its acreage in northern Oklahoma's Mississippi Lime play.
BY JAY F. MARKS Modified: February 25, 2013 at 8:04 pm •  Published: February 25, 2013

Sinopec is no stranger to the area, having struck a $2.5 billion deal with Devon Energy Corp. in January 2012 that included acreage in the Mississippi Lime and four other resource plays.

Gheit said such deals allow Chinese oil companies to learn techniques needed to develop that country's abundant resources.

“I call it legalized industrial espionage,” he said.

Chesapeake previously has agreed to two development deals with CNOOC International Ltd., a subsidiary of one of China's largest independent oil companies.

CNOOC paid nearly $1.8 billion for a stake in Chesapeake's operations in the Eagle Ford Shale in south Texas and the Niobrara Shale in northeast Colorado and southeast Wyoming. The Eagle Ford deal was announced in January 2011, while the Niobrara deal was announced in October 2010.

Chesapeake has been working since last year to sell assets to offset a looming budget shortfall.

The company sold more than $11 billion worth of assets to avert a cash crunch last year.

Several days before Monday's deal was announced, Chesapeake Chief Financial Officer Nick Dell'Osso said the company plans to sell $5 billion to $7 billion in assets this year.

Chesapeake also intends to sell acreage in south Texas' Eagle Ford Shale and areas outside its core holdings.