Total makes $2.3B bet on Chesapeake shale

Chesapeake Energy Corp. says it has started a joint venture with a unit of French energy company Total SA for oil drilling in Ohio’s Utica Shale.

Total will pay Chesapeake and a smaller partner $2.32 billion in a deal that adds U.S. oil and gas assets that have become a common target of overseas oil companies.

The deal announced Jan. 3 calls for Total to pay Chesapeake and a smaller partner $2.32 billion.

In exchange, Total gets a 25 percent share in 619,000 acres in 10 counties in Ohio. Chesapeake is getting $610 million up front. The rest of its compensation will be in exchange for drilling through 2014.

Most of the land is owned by Chesapeake, which will operate the joint venture.

The land in the Utica Shale is especially valuable because it is thought to contain a large amount of oil, as opposed to the natural gas more common in other shale.

Chesapeake is getting $610 million up front. The rest of its compensation will be in exchange for drilling through 2014.

Chesapeake announced plans for the joint venture in November but did not identify its partner then.

—Associated Press