Chesapeake reaches $2 billion deal with Chinese company

CNOOC Limited has agreed to pay Chesapeake $1.08 billion for an interest in the Oklahoma City-based company's 600,000 net acres in the Eagle Ford, according to the joint venture announced Sunday.

CNOOC also will pay 75 percent of Chesapeake's drilling and completion costs in the area until it has paid another $1.08 billion. Chesapeake expects that to occur by the end of 2012.

The deal is Chesapeake's fifth shale development transaction, totaling about $13 billion.

"This transaction will provide the capital necessary to accelerate drilling of this large domestic oil and natural gas resource, resulting in a reduction of our country's oil imports over time, the creation of thousands of high-paying jobs in the U.S. and in the payment of very significant local, state and federal taxes," CEO Aubrey McClendon said.

Officials said the Chesapeake-CNOOC agreement will advance U.S. and Chinese efforts to reduce greenhouse gas emissions and accelerate commercial opportunities for shale gas development in China.

"As one of the world's largest independent oil and gas companies, CNOOC Limited is keeping a close watch on the development of the upstream sector across the world, among which is shale oil and natural gas development," Chairman Fu Chengyu said. "CNOOC Limited has the desire and ability to establish itself in this field in a suitable scale by cooperating with a leading company such as Chesapeake, which we believe will benefit both parties reflecting our win-win philosophy.