French oil and gas company Total said on Sept. 9 it will exercise its preemption right to buy the remaining 75% stake in Barnett shale assets it did not already own from Chesapeake.
The assets located in north Texas, with a net production of approximately 65,000 barrels of oil equivalent per day, include 215,000 developed and undeveloped acres of land, wells, leases, minerals, buildings and other properties.
“With the new conditions created by the exit of Chesapeake and the associated restructuring of the midstream contracts, we believe that we can extract significant value from the substantial, well-located resource base,” Jose Ignacio Sanz, head of Total E&P in the United States, said in the statement.
Under the terms of the deal, Chesapeake will pay $334 million to Williams, a company that gathers and processes 80% of the gas from the Barnett assets, to terminate its gathering agreement, it said.
“Total E&P USA will supplement Chesapeake’s payment with $420 million to Williams for a fully restructured, competitive gas gathering agreement,” the statement said, adding that Total will also pay $138 million to be released from three other midstream capacity reservation contracts.
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