In three deals in less than a month, Midcontinent upstream gas-asset consolidator Chesapeake Energy Corp., Oklahoma City, purchased $830 million more Midcontinent reserves and production-from Oneok Inc., El Paso Corp. and Vintage Petroleum Inc. Altogether, the deals give Chesapeake an additional 117.5 million cu. ft. equivalent of production per day, 550 billion cu. ft. equivalent of proved reserves and 138 billion cu. ft. equivalent of probable and possible reserves. To Tulsa-based Oneok, which was raising funds in its buy-out of Westar Energy's stake in the company, Chesapeake paid $300 million in cash for properties with daily production of 47 million cu. ft. of gas equivalent, 200 billion cu. ft. equivalent of proved gas reserves and 60 billion of probable and possible reserves. To Houston-based El Paso, which is raising cash to pay short-term debt and improve its liquidity, Chesapeake paid $500 million for an estimated 328 billion cu. ft. of gas equivalent of proved gas reserves, 70 billion cu. ft. equivalent of probable and possible reserves, 293,000 leasehold acres and current daily production of 67 million cu. ft. of gas equivalent. To Vintage, which is remodeling its balance sheet, Chesapeake paid $30 million for an estimated 22 billion cu. ft. equivalent of proved gas reserves, 8 billion cu. ft. equivalent of probable and possible reserves and daily production of 3.5 million cu. ft. equivalent. The deals will increase Chesapeake's estimated proved reserves to 2.75 trillion cu. ft. of gas equivalent, and its projected April 2003 production to about 640 million cu. ft. equivalent per day. After allocating $50 million of the El Paso-deal purchase price to unevaluated leasehold for probable and possible reserves, Chesapeake's cost for proved reserves is $1.37 per thousand cu. ft. of gas equivalent. After allocating $3 million of the Vintage-deal price to unevaluated leasehold, Chesapeake's cost for the proved reserves will be $1.23 per thousand cu. ft. equivalent. The El Paso and Vintage properties' lease operating expenses average $0.25 per thousand cu. ft. equivalent, compared with $0.54 for Chesapeake during 2002. The company hedged 90% of its projected oil production for 2003 at an average Nymex price of $27.78 and 55% of its expected 2003 gas production at an average Nymex price of $4.70 per million Btu. Chesapeake sold 20 million common shares at $8.10 each and privately placed $300 million of new 7.5% senior notes due 2013 and $200 million of new 6% cumulative convertible preferred stock to finance the El Paso and Vintage deals. To close the acquisition from Oneok, Chesapeake used proceeds from a December common stock offering at $7.50 a share and $150 million of 7.75% senior notes. -Petroleum Finance Week