As reported by Bloomberg News on January 4th the largest oil company in France has acquired a $2.32 billion holding in Ohio’s Utica shale region from Chesapeake Energy Corp. and EnerVest Ltd. TOTAL will gain a 25 percent stake in 619,000 acres of Utica shale in eastern Ohio which is rich in liquids as well as natural gas. Chesapeake is reported to get $2.03 billion and EnerVest $290 million.
“Given current weakness of U.S. natural gas, now below $3, it is clear to us that TOTAL is being attracted by the liquid-rich portion of this acreage,” said Bertrand Hodee, head of oil and gas research at Kepler Capital Markets in Paris.
Chesapeake will remain the operator of the Utica venture. TOTAL will also help pay for infrastructure projects such as pipelines used for production. The Oklahoma City-based Chesapeake received $610 million in cash from the deal when it closed on December 30th and TOTAL will pay about $1.42 billion toward future drilling costs.
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