Chesapeake to acquire south Texas properties from Laredo for $200M

Exploration and production independent Chesapeake Energy has agreed to purchase south Texas natural gas properties from privately held Laredo Energy L.P. for $200 million, Chesapeake said Oct. 30.

Chesapeake said it would gain reserves of about 196 billion cubic feet of gas equivalent, 108 billion cubic feet of which are proved, and 88 bcf probable or possible. The properties, in the Zapata County portion of the Texas Lobo trend, are currently producing about 30 million cubic feet of gas equivalent per day.

Over the past two years, “Chesapeake has built an operation presence in south Texas where the company believes its deep drilling, 3-D seismic and tight sands expertise can provide competitive advantages and attractive returns on its investment capital,” the company said.

Chesapeake, predominantly a U.S. Midcontinent player, has announced or completed $1.2 billion worth of property acquisitions so far this year, including the Laredo deal.

Overall, Chesapeake said it expects to produce between 74 and 74.5 billion cubic of natural gas equivalent during this year’s final quarter, a more than 4 percent increase from the third quarter’s 71 billion cubic feet of equivalent.

Tenth consecutive quarter of growth

Oil and natural gas production in the 2003 third quarter alone increased 52 percent compared to the 2002 third quarter and 5.4 percent from the 2003 second quarter, the company said.

Chesapeake reported 2003 third-quarter net income of $81.9 million or 33 cents per share, compared to net income of $14 million or 8 cents per share for the same period last year. Revenues were $454.5 million versus $196.5 million for the year-ago quarter.