HOUSTON (Dow Jones Newswires), Oct. 14, 2010

Chesapeake's Chief Executive Aubrey McClendon said that most significant natural gas and oil shale fields in the U.S. have already been found, and that investors shouldn't hold their breath for major new
discoveries.

"If you decided, I'm going to pass on the Barnett, pass on the Haynesville, pass on the Marcellus, and you were going to wait for the next four or five--there won't be any," McClendon said Wednesday during the company's annual meeting with analysts, referring to tight, hydrocarbons-rich rock formations in Texas, Louisiana and the U.S. Northeast, respectively. "By the end of 2011 it will be over. There won't be any basins that have escaped investigation." The comments come three days after Chesapeake agreed to sell a third of its interest in south Texas' Eagle Ford shale formation to Chinese state-run Cnooc for $2.16 billion in cash and drilling funding.

Shale formations were believed to be impractical sources of fossil fuels until recent years. Technological advances in hydraulic fracturing--shattering the rocks to allow oil and gas to seep from the cracks--and horizontal drilling have unlocked vast reserves and prompted international companies to scramble for entry into the field pioneered by independent firms like Oklahoma City-based Chesapeake.

McClendon said Chesapeake will continue to court joint venture partners for its interests, including those in the Niobrara shale in northeast Colorado and the Permian Basin in west Texas. And Chesapeake may sell its expertise to other companies considering shale plays overseas. But Chesapeake isn't planning any foreign investments, McClendon said. "We aren't going to Poland, we aren't going to Canada," he said. "In terms of spending Chesapeake capital overseas, I don't see it."

Instead, McClendon pledged that Chesapeake, which he co-founded and took public in 1993, would shift its focus from natural gas to become a major oil producer. Natural gas prices have been in a prolonged slump due in part to the glut of supply created by the shale frenzy. But gasoline-like condensate, which trades on par with oil, is abundant in many shale formations--although not in volumes that could drive the price of oil down. "We sit on 10 [billion] to 15 billion barrels of oil that will change the valuation of this company over time," McClendon said.