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Chesapeake reaches $2 billion deal with Chinese company

Chesapeake Energy Corp. has reached a deal worth more than $2 billion with CNOOC Limited for a share of its leasehold in south Texas' Eagle Ford Shale.
BY JAY F. MARKS Published: October 11, 2010

"Partnering with Chesapeake on this project to develop shale oil and natural gas jointly not only satisfies the spirit of Sino-U.S. cooperation in the energy sector, but also underscores CNOOC Limited's responsible approach to climate change issues and its social responsibilities."

CNOOC CEO Yang Hua said the cooperation deal with Chesapeake is consistent with the company's "value-driven overseas development strategy."

"The execution of this project will benefit CNOOC Limited's long-term production and reserves growth and should produce considerable returns for our shareholders," Hua said. "Chesapeake, as the world's leading company in the shale oil and natural gas field, has accumulated abundant experience on drilling and completion in various U.S. shale plays with world-class partners.

"We are therefore very confident about this project's potential success."

McClendon said the CNOOC deal fits within Chesapeake's plan to increase shareholder value.

"Chesapeake has continued to maintain a majority position in each of the five major projects subject to development arrangements ranging from 67 percent to 80 percent," he said. "The implied predevelopment value of Chesapeake's retained interest in those shale ventures is approximately $37 billion based on the valuations in the sale transactions."

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