Business News
Statoil Hydro inks billion-dollar deal with US group
Nov 11, 2008, 7:36 GMT
Oslo - Norwegian state-controlled energy group Statoil Hydro said Tuesday it has signed a 1.25-billion-dollar deal with US natural gas group Chesapeake Energy Corporation.
The deal gives Statoil Hydro a 32.5-per-cent stake in Chesapeake's Marcellus shale gas acreage in the Appalachia region, north-eastern US.
In addition to the 1.25-billion-dollar cash payment, Statoil was to pay 2.1 billion dollars for a 75-per-cent future stake for the drilling and completion of wells during the period 2009-12.
Chesapeake, the largest US natural gas producer, was in turn required to maintain a significant level of drilling activity, the statement said.
Statoil Hydro said the deal secured 'future, recoverable equity resources in the order of 2.5 (billion)-3.0 billion barrels of oil equivalent (boe).'
Both groups estimated the programme could support the drilling of 13,500 to 17,000 horizontal wells over the next 20 years. Each well was estimated to cost some 3.5 million dollars.
The transaction was expected to close by the end of the year.
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