Total signs $2.3b US shale deal with Chesapeake and EnerVest

Oil major Total SA signed a $2.3 billion deal with Chesapeake Energy Corp and EnerVest, continuing a trend of European and Asian oil and gas companies buying into US shale plays. The deal will give Total a 25 per cent stake in a joint venture with the two US companies in the liquids-rich Utica Shale area of eastern Ohio, the French company said in a statement yesterday. North America has in recent years seen a boom in energy resources such as shale gas, raising the prospect that the world's largest economy may lower its dependence on imported energy. Total has paid $610 million (Dh 2.239 billion) to Chesapeake, while EnerVest is receiving $290 million. Chesapeake will receive a further $1.42 billion contribution to drilling and well completion costs, expected by the end of 2014, it said in a separate statement. Strategy "This is consistent with our strategy to develop positions in unconventional plays with large potential and, in this case, with value predominantly linked to [the] oil price," Total Exploration and Production President Yves-Louis Darricarrere said. He added that the venture would provide Total with "a material position in a valuable long-term resource base under attractive terms". Total, which already has a joint venture with Chesapeake in the Barnett Shale area in Texas, has said it is looking to boost its position in US shale basins that have crude oil or natural gas with a high liquids content, making it more valuable than dry gas. Chesapeake, the second-biggest US producer of natural gas, had previously announced a joint venture with an undisclosed major international energy company on some of its prospective acreage in the Utica Shale area in November. The latest joint venture with Total covers about 619,000 net acres, of which 77,000 were contributed by Houston-based EnerVest, Chesapeake said.