Chesapeake and CNOOC announced the closing of a project cooperation agreement whereby CNOOC International Limited, a wholly owned subsidiary of CNOOC Limited, purchased a 33.3% undivided interest in Chesapeake's 800,000 net oil and natural gas leasehold acres in the Denver-Julesburg (DJ) and Powder River Basins in northeast Colorado and southeast Wyoming. The consideration for the transaction was $570 million in cash. In addition, CNOOC Limited has agreed to fund 66.7% of Chesapeake's share of drilling and completion costs up to $697 million, which Chesapeake expects to occur by year-end 2014.
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "We are very pleased to once again have CNOOC Limited as our partner in one of our shale development transactions. We look forward to accelerating the development 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 the payment of very significant local, state and federal taxes."
Yang Hua, Chief Executive Officer of CNOOC Limited, stated, "Congratulations on the successful closing of the transaction, which will further enhance our presence in the shale oil and gas industry. In the future, we will closely cooperate with Chesapeake to fully explore the potential of the project and bring benefits to both parties as well as other stakeholders."
Chesapeake's advisor on the transaction was Jefferies & Company, Inc., and CNOOC Limited's advisor was Tudor, Pickering, Holt & Co. Securities, Inc.
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