Attached files
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8-K - CURRENT REPORT - CHESAPEAKE ENERGY CORP | chk01042010_8k.htm |
EX-99.3 - PRESS RELEASE - DECEMBER 28, 2009 - CHESAPEAKE ENERGY CORP | chk12282009_993.htm |
EX-99.2 - UPDATED OUTLOOK FOR 2010 AND 2011 - CHESAPEAKE ENERGY CORP | chk01042010_992.htm |
Exhibit 99.1
N
e w s R e l e a s e
Chesapeake
Energy Corporation
P.
O. Box 18496
Oklahoma
City, OK 73154
|
FOR
IMMEDIATE RELEASE
JANUARY
4, 2010
INVESTOR CONTACT:
JEFFREY
L. MOBLEY, CFA
SENIOR
VICE PRESIDENT –
INVESTOR
RELATIONS AND RESEARCH
(405)
767-4763
jeff.mobley@chk.com
|
MEDIA CONTACT:
JIM
GIPSON
DIRECTOR
– MEDIA RELATIONS
(405)
935-1310
jim.gipson@chk.com
|
CHESAPEAKE
ENERGY CORPORATION ANNOUNCES $2.25 BILLION BARNETT
SHALE
JOINT VENTURE WITH TOTAL E&P USA, INC.
OKLAHOMA
CITY, OK, JANUARY 4, 2010 – Chesapeake Energy Corporation (NYSE:CHK) today
announced the execution of an agreement for a $2.25 billion joint venture with
Total E&P USA, Inc., a wholly-owned subsidiary of Total S.A. (NYSE:TOT,
FP:FP) (“Total”), whereby Total will acquire a 25% interest in Chesapeake’s
upstream Barnett Shale assets. Total will pay $800 million in cash at closing
and will pay an additional $1.45 billion by funding 60% of Chesapeake’s share of
drilling and completion expenditures until the $1.45 billion obligation has been
funded, which Chesapeake expects to occur by year-end 2012. Closing
of the transaction, which is subject to regulatory approval, is anticipated by
the end of January 2010.
The
assets subject to the Chesapeake-Total joint venture include approximately
270,000 net acres of leasehold in the Core and Tier 1 areas of the Barnett,
approximately 700 million cubic feet of natural gas equivalent per day of
current net production and approximately 3.0 trillion cubic feet of natural gas
equivalent (tcfe) of proved reserves (0.75 tcfe net to Total). In
addition, Chesapeake believes that its leasehold position will support the
drilling of approximately 3,100 additional net locations (775 net to Total) with
approximately 6.3 tcfe of unrisked unproved reserves (1.6 tcfe net to
Total). Approximately 60% of Chesapeake’s Core and Tier 1 leasehold
is held by production (HBP) and therefore considered developed.
In the
framework of the joint venture, Chesapeake plans to continue acquiring leasehold
in the Barnett and Total will acquire its 25% share of the new acreage on
promoted terms until December 31, 2015. After such date, Total’s
right to acquire its 25% proportionate share of Chesapeake’s leasehold will be
on an unpromoted basis and Total will also begin paying 25% of Chesapeake’s
support costs related to the joint venture’s corporate development activities.
Christophe
de Margerie, Chief Executive Officer of Total, stated, “Total is pleased to be
making a strategically important move by entering into the U.S. shale gas
business with Chesapeake, the world’s leading shale gas
operator. This joint venture will provide us with a solid position in
an attractive long-term resource base under competitive terms. It
will allow Total to develop its expertise in unconventional hydrocarbons in
order to expand its unconventional business worldwide. Additionally,
this transaction adds yet another key support for Total to build the gas value
chain position the Group has established in the U.S., the world’s largest and
most liquid natural gas market, with our existing capacity rights in the Sabine
Pass LNG terminal and our gas trading and marketing
organization. Total is conscious of the environmental aspect linked
to producing shale gas and has confidence in Chesapeake’s capacity to contain
the impact of the Barnett Shale gas’ operations on the environment and respect
local and federal regulations and guidelines.”
Aubrey K.
McClendon, Chesapeake’s Chief Executive Officer, commented, “We are very pleased
to announce our fourth joint venture transaction in the Big 4 shales and we are
honored to partner with Total to further develop the Barnett
Shale. Total is one of the largest and most well respected industrial
enterprises in the world. It was established in 1924, is the fifth
largest integrated natural gas and oil company, has approximately 97,000
employees and has a market valuation exceeding $150 billion. Total
approached Chesapeake about a Barnett joint venture approximately seven months
ago and during this time the companies have worked diligently and thoughtfully
to structure this mutually beneficial joint venture.
“This
transaction will allow Chesapeake to reduce its financial leverage and future
capital expenditures and further position us to deliver industry-leading finding
and development costs and returns on capital for years to come. This
brings our combined shale joint venture proceeds, including upfront cash
payments and drilling carries, during the past 18 months to approximately $10.8
billion, which compares very favorably against a cost basis in the assets sold
of approximately $2.7 billion. Chesapeake has maintained majority
positions in these joint venture shale assets ranging from 67.5% to 80% that
have an implied remaining value of approximately $33 billion based on the
original valuations of the four joint ventures.
“We are
proud to welcome Total into our family of joint venture partners, which also
includes the world-class companies Plains Exploration & Production Company
(NYSE:PXP), BP America (NYSE:BP) and Statoil (NYSE:STO). We believe
these partnerships have proven to be mutually beneficial to both Chesapeake and
its partners. We plan to continue to take advantage of our large
asset base by pursuing other joint ventures, including potentially our large
acreage positions in the Eagle Ford Shale and in several Mid-Continent
unconventional plays that we believe would be attractive to potential
partners. We have agreed to discuss with Total an Eagle Ford joint
venture as well as joint ventures covering several Canadian natural gas shale
plays in which Total has shown an interest.”
Chesapeake’s
exclusive advisor on the transaction was Jefferies & Company,
Inc.
Conference
Call Information
A
conference call to discuss this release has been scheduled for Monday morning,
January 4, 2010, at 10:00 a.m. EST. The telephone number to access
the conference call is 913-312-0635 or toll-free
888-668-1637. The
passcode for the call is 5634585. We
encourage those who would like to participate in the call to dial the access
number between 9:50 and 10:00 a.m. EST. For those unable to
participate in the conference call, a replay will be available for audio
playback from 2:00 p.m. EST on January 4, 2010 through midnight EST on January
18, 2010. The number to access the conference call replay is 719-457-0820 or toll-free
888-203-1112. The
passcode for the replay is 5634585. The
conference call will also be webcast live on the Internet and can be accessed by
going to Chesapeake’s website at www.chk.com in the “Events” subsection of the
“Investors” section of our website. The webcast of the conference
call will be available on our website for one year.
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. They include the anticipated closing of the Total joint
venture transaction, an estimate of natural gas and oil reserves, planned
drilling activity and plans to pursue other joint venture
transactions. Actual results, including the timing of the closing of
the Total joint venture, could differ materially as a result of a variety of
risks and uncertainties. Estimates of unproved reserves are by their
nature more speculative than estimates of proved reserves and accordingly are
subject to substantially greater risk of actually being realized by the
company. While we believe our calculations of future drillsites and
estimation of unproved reserves are reasonable, such calculations and estimates
have not been reviewed by third-party engineers or appraisers. See
“Risk Factors” in our 2008 Form 10-K and 2009 second quarter Form 10-Q filed
with the U.S. Securities and Exchange Commission on March 2, 2009 and August 10,
2009, respectively, for a discussion of risk factors that affect our business
and could affect the joint venture announced today and other potential joint
ventures. We caution you not to place undue reliance on our
forward-looking statements, which speak only as of the date of this press
release, and we undertake no obligation to update this information.
Chesapeake Energy Corporation is the
second largest producer of natural gas in the U.S. Headquartered in
Oklahoma City, the company's operations are focused on the development of
onshore unconventional and conventional natural gas in the U.S. in the Barnett
Shale, Haynesville Shale, Fayetteville Shale, Marcellus Shale, Anadarko Basin,
Arkoma Basin, Appalachian Basin, Permian Basin, Delaware Basin, South Texas,
Texas Gulf Coast and East Texas regions of the United States. Further
information is available at www.chk.com.
Total is one of the world’s major oil
and gas groups, with activities in more than 130 countries. Its
97,000 employees put their expertise to work in every part of the industry
– exploration and production of oil and natural gas, refining and marketing, gas
& power and trading. Total is working to keep the world supplied
with energy, both today and tomorrow. The Group is also a first rank
player in chemicals. Further information is available at www.total.com.