Chesapeake Acquires Oil and Gas Assets From Anadarko, Forms JV

Transaction Details: 

Chesapeake Energy Corporation and Anadarko Petroleum Corporation jointly announced today the completion of multiple agreements, including a joint venture involving Chesapeake and Anadarko assets in the Deep Haley area of the Delaware Basin in West Texas.

Through the formation of a joint venture and other separate agreements, Chesapeake received:

25% of Anadarko's existing Deep Haley area production;
25% of Anadarko's leasehold in the central and eastern portions of the Deep Haley area;
50% of Anadarko's leasehold and contractual rights in the western portion of the Deep Haley area;
A lease from Anadarko on 2,100 net acres in the Fayetteville Shale play in Arkansas;
An assignment of 5,600 net acres of undeveloped leasehold in the Anadarko Basin in western Oklahoma; and
The Oklahoma City real estate assets acquired by Anadarko last year as part of its acquisition of Kerr-McGee Corporation.

Through the formation of the joint venture and other separate agreements, Anadarko received:

Approximately $310 million in cash and other consideration, including reimbursement of capital expenditures previously incurred by Anadarko in connection with the development of the Deep Haley properties and Chesapeake's commitment to fund a portion of Anadarko's future Deep Haley area capital costs; and
50% of certain Chesapeake non-producing leasehold interests in Loving County, Texas.

In total, Anadarko and Chesapeake will jointly evaluate and explore more than 1 million gross acres in the Deep Haley area, on which drilling, completion, production and midstream operations will be shared on roughly a 50/50 basis. The two companies plan an aggressive drilling program for the area, with Anadarko and Chesapeake each currently operating eight drilling rigs in the Deep Haley area with the possibility of increasing drilling activity as the joint venture develops.