BP Pays $1.9 Billion for Chesapeake Gas Properties
More funds for the Haynesville.......
Sept. 2 (Bloomberg) -- BP Plc, Europe's second-largest oil company, agreed to buy Arkansas natural-gas properties from Chesapeake Energy Corp. for $1.9 billion as high energy prices make drilling from hard-to-access shale deposits profitable.
BP will take a 25 percent in the Fayetteville Shale joint venture with Chesapeake in Arkansas. The purchase follows BP's $1.75 billion acquisition of Chesapeake's assets in the Woodford Shale formation in Oklahoma in July.
``Development of these resources, along with our leading position in coal bed methane production, and our extensive tight gas plays throughout North America, will enhance BP's position as a leader in 'unconventional' gas technology,'' Andy Inglis, BP's chief executive of exploration and production, said today in an e-mailed statement.
Oil majors are scrambling to target fuel from rock formations that are more costly to exploit than traditional fields. Such so-called shale plays were made more profitable this year as gas prices outpaced crude oil. Royal Dutch Shell Plc, BP's larger rival, recently completed the purchase of Canadian shale gas producer Duvernay Oil Corp. for $5.8 billion.
The latest purchase will ``enable growth of our North American onshore natural gas production'' from 470,000 barrels a day of oil equivalent, Inglis said. ``BP has made a strategic entry into three top tier shale plays in North America'' with estimated resources of 1 billion barrels of oil equivalent in the Haynesville, Woodford and Fayetteville fields.
Additional Leasehold
Chesapeake plans to continue acquiring leasehold in the Fayetteville Shale play and BP will have the right to a 25 percent participation in any additional leasehold, the companies said today in a statement.
At the same time, competition for gas shale assets in the Louisiana and Texas-based Haynesville formation is increasing.
In July, Chesapeake agreed to sell to Plains Exploration & Production Co., a Houston-based oil and gas producer, a 20 percent stake in the Haynesville Shale joint venture for more than $3 billion.
Shell and EnCana Corp., Canada's largest gas producer, are developing a shale-gas project in Haynesville. The Hague-based Shell holds 50 percent of the venture, which covers 3,000 acres, Chief Financial Officer Peter Voser said July 31.
Sept. 2 (Bloomberg) -- BP Plc, Europe's second-largest oil company, agreed to buy Arkansas natural-gas properties from Chesapeake Energy Corp. for $1.9 billion as high energy prices make drilling from hard-to-access shale deposits profitable.
BP will take a 25 percent in the Fayetteville Shale joint venture with Chesapeake in Arkansas. The purchase follows BP's $1.75 billion acquisition of Chesapeake's assets in the Woodford Shale formation in Oklahoma in July.
``Development of these resources, along with our leading position in coal bed methane production, and our extensive tight gas plays throughout North America, will enhance BP's position as a leader in 'unconventional' gas technology,'' Andy Inglis, BP's chief executive of exploration and production, said today in an e-mailed statement.
Oil majors are scrambling to target fuel from rock formations that are more costly to exploit than traditional fields. Such so-called shale plays were made more profitable this year as gas prices outpaced crude oil. Royal Dutch Shell Plc, BP's larger rival, recently completed the purchase of Canadian shale gas producer Duvernay Oil Corp. for $5.8 billion.
The latest purchase will ``enable growth of our North American onshore natural gas production'' from 470,000 barrels a day of oil equivalent, Inglis said. ``BP has made a strategic entry into three top tier shale plays in North America'' with estimated resources of 1 billion barrels of oil equivalent in the Haynesville, Woodford and Fayetteville fields.
Additional Leasehold
Chesapeake plans to continue acquiring leasehold in the Fayetteville Shale play and BP will have the right to a 25 percent participation in any additional leasehold, the companies said today in a statement.
At the same time, competition for gas shale assets in the Louisiana and Texas-based Haynesville formation is increasing.
In July, Chesapeake agreed to sell to Plains Exploration & Production Co., a Houston-based oil and gas producer, a 20 percent stake in the Haynesville Shale joint venture for more than $3 billion.
Shell and EnCana Corp., Canada's largest gas producer, are developing a shale-gas project in Haynesville. The Hague-based Shell holds 50 percent of the venture, which covers 3,000 acres, Chief Financial Officer Peter Voser said July 31.
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Replies to This Discussion
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Permalink Reply by griiker on
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I agree totally with your comments. Congress created the overseas oil sourcing with the windfall profits tax, causing unemployment in the energy sector to skyrocket during the 1980's even many of the top execs were throwing in the towel. The price plummet of the 1980's went hand in hand, but congress has failed to place the blame for its comeback where it belongs, our bloated fleet of gas guzzling SUVs most of whom are underutilized and leaving their fuel usage unjustified.
The independents, and for that matter land owners, should have some sort of advocacy before congress gets to uppity and holds the entire industry accountable for the sins of everyone.
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Maybe now that CHK has more $$$$ input into their co. they will start more drilling and then come pick up with the leasing they left off on so apruptly. They are no where near running low on money. It seems they are buying and selling as quick as they buy with the intent of further developing the Haynesville shale play.
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Permalink Reply by Alamo on
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Kat,
The link:
http://www.forbes.com/feeds/ap/2008/09/ap5377911.html?partner=email
That's $I.9 Billion for 135,000 acres or: $14,074.07 per mineral acre. Regardless what the oil and gas people tell us ALL those 135,000 acres are not all in the Fayetteville Shale "Honey Hole"
This is additional evidence that supports "Fair Market Value".
East Texas and rural NW LA, are vastly superior places to develop the LARGEST gas play in North America. Get in gear major oil corporations and put your money on the table. BP and Shell damn sure know what theyr'e doing! ExxonMobil and Chevron are yet to be heard from--why?
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Permalink Reply by P.G. on
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Why would CHK want to rush to drill the haynesville which would flood the market and drive down well head prices?
CHK, just like land owners who haven't signed leases know what they are sitting on and can command top dollar. Only CHK is playing the Giants, like we think we are playing CHK. I wouldn't look for them to rush to produce until prices are under more pressure to go up. What CHK has to take to the bank with the big boys is potential. Dragging their feet is likely more profitable than mining gas right now. Guess we will have to wait until they get done playing their games.
I bet all we will get from our leases until the government gets things going are only token wells in our sections to hold our leases.
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