Total joins Chesapeake Energy in $2bn gas joint venture- Nice move!
Great move. Finally, French oil company Total SA [[TOT]], is joining some other international energy heavyweights in investing in U.S. shale natural gas reserves. Total is paying $800 million U.S. for a 25-per-cent interest in the U.S. Chesapeake Corp.’s [[CHK]] Barnett Shale deposits in North Texas and will invest almost $1.5 billion U.S. more to fund 60 per cent of Chesapeake’s drilling and completion expense.
But in 2011, Chesapeake’s strengthening production output will push volumes above earlier expectations. The company, which is based in Oklahoma City, raised its production outlook by 50 mmcfe/d to 3,050 mmcfe/d.
Total is the latest global energy company to buy into the U.S. gas-exploration boom, which until recently was dominated by smaller, domestically focused companies like Chesapeake, Devon Energy Corp. [[DVN]] and Southwestern Energy Company [[SWN]] European giants BP PLC [[BP]]and Statoil SA struck similar deals with Chesapeake in 2008, and Italy’s ENI SPA ROMA [[EIPAF]] last year paid $280 million for a Barnett Shale stake owned by Quicksilver Resources Inc. [[KWK]].
Last month, Exxon Mobil Corporation [[XOM]] agreed to pay $31 billion for Fort Worth-based gas producer XTO Energy Inc [[XTO]].