BP America buys 25% Chesapeake stake

British oil company BP PLC said Sept. 2 that its U.S. unit plans to buy a 25 percent stake in Chesapeake Energy Corp.’s Fayetteville Shale assets in Arkansas for US$1.9 billion. BP said that a letter of intent has been signed for the deal, which comes just a month after BP America bought Chesapeake’s Arkoma Basin Woodford Shale assets in Oklahoma for US$1.7 billion.

“This transaction, when combined with our recent Woodford acquisition, establishes a material position in the two attractive shale plays in the Arkoma Basin,” said BP Chief Executive of Exploration and Production Andy Inglis.

“Together with our substantial position in the emerging Haynesville Shale play in East Texas, BP has made a strategic entry into three top tier shale plays in North America and established potential shale resources of 1 billion barrels oil equivalent net to BP,” Inglis added. The Arkansas assets have a daily net production of approximately 180 million cubic feet of natural gas equivalent and include approximately 540,000 net acres of leasehold, which the companies believe could support the drilling of up to 6,700 future horizontal wells.

—The Associated Press