Wednesday, September 3, 2008

BP Purchases Arkansas Natural Gas Assets from Chesapeake

BP America has agreed to purchase a 25 percent stake in Chesapeake Energy Corp.’s Fayetteville Shale assets in Arkansas for $1.9 billion.

As part of the agreement, Houston-based BP America will pay $1.1 billion in cash, and the rest will come by way of funding Chesapeake’s 75 percent share of drilling and completion expenditures until the $800 million is met.

The deal includes about 540,000 net acres of leasehold, of which BP America will own about 135,000 net acres. The assets have a daily net production of about 180 million cubic feet of natural gas equivalent.

Oklahoma City-based Chesapeake (NYSE: CHK) plans to continue acquiring leaseholds in the Fayetteville Shale play, and BP will have the right to a 25 percent participation in any such additional leasehold.

BP America (NYSE: BP) expects to close the deal this month.

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