Total E&P USA announced that it is exercising its preemption right to acquire Chesapeake’s 75% interests in the jointly held Barnett Shale operating area. Total E&P USA has owned the remaining 25% in the Barnett Assets since December 2009. With the preemption, Total E&P USA will be the 100% owner and operator of the assets.
Properties in the proposed transaction include approximately 215 000 net developed and undeveloped acres, wells, leases, minerals, buildings and properties. Associated 2016 net production is approximately 65 000 boe/d.
The preemption and associated transactions are subject to a number of conditions, including the receipt of third-party consents, and are expected to close in 1Q16.
Under the terms of the transaction, Chesapeake will pay US$334 million to Williams, the gatherer and processer of 80% of the gas from the Barnett Assets, to terminate its gathering agreement, projected Minimum Volume Commitment (MVC) shortfall payments and fees pertaining to the Barnett Shale assets.
José Ignacio Sanz, President & CEO Total E&P USA, commented: “Over the six years that we have been involved in the Barnett, we have gained an in-depth understanding of the play and the technology. 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 of the play by combining focused upstream operating efficiency, streamlined midstream contract management and marketing savvy through Total’s trading affiliate Total Gas & Power North America. As an operator, we look forward to working with all stakeholders, our leaseholders, the Dallas Fort Worth and other authorities, Williams and other midstream partners, and our customers. Increasing our stake in the Barnett shale supports Total’s global strategy to be a leader in natural gas.”
Edited from press release by Angharad Lock
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/09092016/total-exercises-its-preemption-rights-on-barnett-shale-assets-3033/