Total Takes Control Of Barnett Shale Assets From Chesapeake

Reuters

PARIS, Sept 9 (Reuters) - French oil and gas company Total said on Friday it will exercise its preemption right to buy the remaining 75 percent stake in Barnett shale assets it did not already own from Chesapeake.

The assets located in north Texas, with a net production of approximately 65,000 barrels of oilequivalent per day, include 215,000 developed and undeveloped acres of land, wells, leases, minerals, buildings and other properties.

"With the new conditions created by the exit of Chesapeake and the associated restructuring of the midstream contracts, we believe that we can extract significant value from the substantial, well-located resource base," Jose Ignacio Sanz, head of Total E&P in United States, said in the statement.

Under the terms of the deal, Chesapeake will pay $334 million to Williams, a company that gathers and processes 80 percent of the gas from the Barnett assets, to terminate its gathering agreement, it said.

"Total E&P USA will supplement Chesapeake's payment with $420 million to Williams for a fully restructured, competitive gas gathering agreement," the statement said, adding that Total will also pay $138 million to be released from three other midstream capacity reservation contracts.

(Reporting by Bate Felix; Editing by Geert De Clercq)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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