Energy

CNOOC, Chesapeake close $1b shale deal

(Agencies)
Updated: 2010-11-16 13:30

China's top offshore oil producer CNOOC Ltd and Chesapeake Energy Corp on Tuesday announced the completion of the Eagle Ford Shale project deal in the United States.

The completion of the deal marks a victory for CNOOC's quest for US government's approval.

New energies to lead copper growth Related readings:  CNOOC Q3 revenue surges on output, price hikes  CNOOC part of joint bid $5b for Jubilee stake  CNOOC starts to build 4th LNG terminal  US likely to give nod to CNOOC deal, despite opposition

Last month, CNOOC agreed to buy a 33.3 percent interest in Chesapeake's 600,000 net oil and natural gas leasehold acres in the Eagle Ford Shale project in South Texas for $1.08 billion cash, plus a $40 million payment adjustment at closing.

CNOOC will also fund 75 percent of Chesapeake's share of drilling and completion costs of up to $1.08 billion by year-end 2012.

Analysts and bankers said the deal could mark the start of more outbound acquisitions as the Chinese company races to meet its aggressive production growth forecasts to feed the country's fast-growing economy.