The joint venture between Sinopec and Chesapeake involves 850,000 acres in the Mississippi Lime play in northern Oklahoma. It produced about 34,000 barrels of oil equivalent per day during the most recent quarter, Chesapeake said. As of the end of the year there were about 140 million barrels of oil equivalent in proven reserves on the land.
Chesapeake said it will get 93 percent of the money when the deal closes, which is expected in the second quarter. It will be paid the rest of the money after other conditions are met.
Future exploration and development cost will be shared between the two companies, with Chesapeake operating the project and conducting all leasing, drilling, completion, operations, and marketing work.
Shares of Chesapeake Energy Corp. fell 89 cents, or 4.3 percent, to $19.61 in late morning trading.