Gas baggage

4 January 2010 By Christopher Swann

A month after XTO agreed to marry Exxon, rival gas outfit Chesapeake Energy is still playing the field of oil majors, most recently unveiling a tieup with Total. Such dalliances can have advantages, but they make Chesapeake less attractive as a permanent partner.

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French oil major Total signed a $2.25 billion tieup with Chesapeake Energy.

Total will take a 25 percent stake in Chesapeake's Barnett Shale gas fields in Texas, paying $800 million in cash and providing $1.45 billion towards the field's development over up to six years.

The deal will give Total additional production of 30,000 barrels of oil equivalent per day of gas and reserves of 130 million barrels of oil equivalent.

Under the terms of the deal, Total will fund 60 percent of Chesapeake's share of drilling and completion expenditures at Barnett until the end of 2012.

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