Printer Friendly Version (pdf format)
OKLAHOMA CITY--(BUSINESS WIRE)--Nov. 11, 2008--Chesapeake Energy
Corporation (NYSE:CHK) today announced the execution of an agreement
for a joint venture with StatoilHydro (NYSE:STO, OSE:STL) whereby
StatoilHydro will acquire a 32.5% interest in Chesapeake's Marcellus
Shale assets in Appalachia for $3.375 billion, leaving Chesapeake with
a 67.5% working interest. The assets include approximately 1.8 million
net acres of leasehold, of which StatoilHydro will own approximately
0.6 million net acres and Chesapeake will own approximately 1.2
million net acres.
StatoilHydro will pay $1.25 billion in cash at closing and will
pay a further $2.125 billion from 2009 to 2012 by funding 75% of
Chesapeake's 67.5% share of drilling and completion expenditures until
the $2.125 billion obligation has been funded. Chesapeake plans to
continue acquiring leasehold in the Marcellus Shale play and
StatoilHydro will have the right to a 32.5% participation in any such
additional leasehold.
Additionally, Chesapeake and StatoilHydro have agreed to enter
into an international strategic alliance to jointly explore
unconventional natural gas opportunities worldwide. Closing of the
transaction and strategic alliance is anticipated to occur by year-end
2008.
Helge Lund, President and CEO of StatoilHydro, stated, "I am
pleased that we today have made a strategically important move by
joining forces with Chesapeake, which is the leading U.S. natural gas
player. We are establishing a strong platform for further developing
our gas value chain business and growing our position in
unconventional gas worldwide. The agreement we have entered into with
Chesapeake provides us with a solid position in an attractive
long-term resource base under competitive terms. Additionally, this
deal adds a major building block to the gas value chain position we
have established in the U.S., the world's largest and most liquid gas
market. This is a significant step in strengthening our U.S. gas
position, building on our existing capacity rights for the Cove Point
LNG terminal, our gas trading and marketing organization and the gas
producing assets in the Gulf of Mexico."
Aubrey K. McClendon, Chesapeake's Chief Executive Officer,
commented, "We are honored to establish a business relationship with
StatoilHydro and are excited about the mutually beneficial nature of
our transaction with them. We believe this transaction creates
substantial value for both companies and unique opportunities for
international growth with one of the leading international oil and gas
companies. Jointly we can export our world class unconventional
natural gas technology for further long-term growth.
"Chesapeake has now completed three shale joint ventures that
collectively value Chesapeake's Haynesville, Fayetteville and
Marcellus Shale assets (before the joint ventures) at approximately
$34 billion. Through these transactions, Chesapeake sold a 20% working
interest in its Haynesville Shale assets to Plains Exploration &
Production Company (NYSE:PXP) for $3.3 billion (thereby retaining an
80% working interest valued at $13.2 billion), a 25% working interest
in its Fayetteville Shale assets to BP America (NYSE:BP) for $1.9
billion (thereby retaining a 75% working interest valued at $5.7
billion) and now has agreed to sell a 32.5% working interest in its
Marcellus Shale assets to StatoilHydro for $3.375 billion (thereby
retaining a 67.5% working interest valued at $7.0 billion). The total
consideration to CHK from these sales has been approximately $8.575
billion, of which approximately $4.0 billion has been (or will be) in
cash and approximately $4.575 billion is in drilling and completion
cost carries. Furthermore, CHK retains the remaining ownership
percentages of the joint ventures that have been valued at
approximately $26 billion, or over $40 per share of value from just
these three shale joint venture transactions. These joint ventures
clearly demonstrate the enormous value of Chesapeake's shale natural
gas assets and the unique capability of our organization to develop
them."
Chesapeake was advised on the transaction by Jefferies Randall &
Dewey of Houston, Texas.
Chesapeake Energy Corporation is the largest producer of natural
gas in the U.S. Headquartered in Oklahoma City, the company's
operations are focused on exploratory and developmental drilling and
corporate and property acquisitions in the Fort Worth Barnett Shale,
Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian
Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast
and Ark-La-Tex regions of the United States. Further information is
available at www.chk.com.
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Chesapeake believes that its
expectation to close the Marcellus Shale joint venture and
international strategic alliance and to execute its development plan
as described is based on reasonable assumptions. No assurance,
however, can be given that such expectation will prove to have been
correct. See "Risk Factors" in the company's 2007 Annual Report on
Form 10-K and Quarterly Report on Form 10-Q for the 2008 third quarter
and other filings with the Securities and Exchange Commission for a
discussion of risk factors that affect its business and could affect
the referenced joint venture and strategic alliance. Chesapeake
undertakes no obligation to publicly update or revise any
forward-looking statements.
CONTACT: Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
Senior Vice President -
Investor Relations and Research
jeff.mobley@chk.com
or
Marc Rowland, 405-879-9232
Executive Vice President
and Chief Financial Officer
marc.rowland@chk.com
SOURCE: Chesapeake Energy Corporation