Chesapeake Energy CEO Looking for Three Joint Venture Deals
HOUSTON (Dow Jones Newswires), Nov. 4, 2011
Chesapeake's Chief Executive Aubrey McClendon said Friday his company's legendary deal-making campaign isn't over, as it aims to potentially strike three joint-venture deals in three regions where it holds acreage.
The areas Chesapeake will look for partners in include the Williston Basin, in North Dakota, the Mississippi Line shale play, and "another oil play that we aren't ready to discuss yet until we drill a few wells in it," McClendon said in an earnings call with investors.
Deals are critical for Chesapeake's aggressive expansion strategy. The Oklahoma City-based company usually spends more than it makes by selling oil and gas in leasing acreage in new areas, and funds the difference by selling some of the land it holds in proven oil plays. On Thursday, the company said it would raise $3.4 billion from two separate deals in the emerging Utica shale play, in Ohio. Some analysts have wondered, though, whether there are still many profitable joint ventures to be struck, as many international oil companies that have been the usual clients are getting familiarized with shale and might want to strike on their own.
Chesapeake Energy, the second-largest natural gas producer in the U.S., is also trying to become a major oil producer, because crude is more profitable than cheap natural gas. It produced about 94,000 barrels a day of crude and liquids in the third quarter, nearly double the amount from last year. McClendon says the company aims to produce an average of 150,000 barrels a day of crude and liquids in 2012, and an average of 250,000 barrels a day in 2015. The company says it can reach this level of production with the assets it already owns.
Copyright (c) 2011 Dow Jones & Company, Inc.
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