NEW YORK (AP) — The French oil company Total SA on Monday made a move into the U.S. natural gas market with a $2.25 billion deal with Oklahoma's Chesapeake Energy Corp.
Total's agreement with Chesapeake comes just a few weeks after Exxon Mobil Corp. said it would buy natural gas producer XTO Energy in a $31 billion all-stock deal.
Shares of Chesapeake climbed $1.57, or 6.1 percent, to $27.45 in morning trading Monday. Total's U.S. shares rose $1.90, or 3 percent, to $65.94 after rising to a 52-week high of $66.04 earlier.
Total said it will pay $800 million in cash for a 25 percent stake in Chesapeake's Barnett Shale assets, which hold vast quantities of natural gas in northern Texas.
The French company will pay an additional $1.45 billion to help fund 60 percent of Chesapeake's share of drilling and completion expenses.
The deal provides Total with additional production of about 175 million cubic feet per day of natural gas. Growth in future years should increase Total's share of production to over 250 million cubic feet per day, the company predicted. Total's share of proven reserves will be about 0.75 trillion cubic feet of gas, with additional unproved reserves of about 1.6 trillion cubic feet.
Total's CEO Christophe de Margerie said the deal is a "strategically important move" into the U.S. shale gas business.
Shale is a layered, sedimentary rock that exists in formations throughout the world. Natural gas is tightly locked in the rock formations and had been extraordinarily expensive to extract until the last few years.
The deal "will allow Total to develop its expertise in unconventional hydrocarbons in order to expand its unconventional business worldwide," Total's CEO said.
Chesapeake's CEO Aubrey McClendon said the transaction boosts the company's financial position.
The companies expect the deal will close at the end of January. Chesapeake, which is based in Oklahoma City, has struck similar partnership deals with Plains Exploration & Production Co., BP America and Statoil.
Business
Total to buy stake in Chesapeake gas assets
- Business
-
-
Heading out
It’s the time of year where outdoor events abound. Doss Heritage and Culture Center has a new space to take advantage of the warmer weather.
-
New Weed Man in town
HUDSON OAKS — Kyle Jaber decided to go back to his roots.
-
Gamer(z) on
t’s a one of a kind facility ... and Weatherford is the first in the Metroplex to have it.
-
New vet dentist
Dr. Joseph Cukjati, DVM has joined the practice of Parker County Veterinary Hospital as a certified veterinary dentist.
-
Breakfast before business
For new (or existing, longtime) businesses, the Weatherford Chamber of Commerce’s monthly Breakfast Before Business is a great way to get yourself known in the community.
-
Get yer equipment
Parker County residents Tina and Tyler Child have operated Northwest Equipment Rentals for 20 years just over the county line in an unincorporated area of Fort Worth.
-
50 years in the making
It’s been said that behind every good man there’s a woman making him even better.
-
Spot on saving money
People are always into saving money. A new program gives them a way to gain rewards simply by shopping their favorite stores.
-
FNB-Weatherford to mark Werner’s 50 years with institution
The First National Bank of Weatherford will celebrate the 50th anniversary of one of the town’s favorite businessmen – Fred Werner.
-
Full Bucket Products
DENNIS — Be good and do good.
- More Business Headlines
-
Heading out
Probe Begins After Conn. Commuter Trains Crash
NTSB Begins Investigation Into Conn. Train Crash
Lotto Fever Sweeps the Country
Conn. Commuter Trains Collide; 60 Go to Hospital
Coffee Run Leads to Hatchet Hitchhiker Arrest
Fmr. IRS Head Insists No Politics in Targeting
CDC: Fecal Bacteria Common in Swimming Pools
$1 Million in Jewels Stolen at Cannes Film Fest
NM Mom Chases Down Child Abductor
Raw: Crash Sends Car Into Fla. Pool
Raw: Obama Sits Down With Elementary Kids
Raw: Bear Falls From Tampa Tree
Ousted IRS Chief: Errors Not Caused by Politics
Terror Suspect Due in Court in Idaho Friday
Raw: Driver Ejected From Truck, Over Bridge
Could Tobacco Be the Next Biofuel?
Wash. State Releases Draft Rules for Legal Pot
Dying Man's Blinks Lead to Murder Conviction
Officials: Texas Tornado Likely Had 200 Mph Wind
Brothers Arrested in NOLA Parade Shooting
