Mystery Company Invests $2.14B in Chesapeake Utica Shale JV

The Utica Shale in eastern Ohio, and Chesapeake Energy’s discovery that it contains oil and wet gas in addition to methane, is paying off big-time for the company. Yesterday, Chesapeake announced a major cash infusion from a new joint venture with a mystery/unnamed “international major energy company” to the tune of $2.14 billion. Some $640 million of that will be paid when the deal officially closes, and the balance of $1.5 billion will be paid by the end of 2014.

A third company in the joint venture is EnerVest. The joint venture values the land leased by Chesapeake and EnerVest at $15,000 per net acre. The previous highest deal for Utica Shale leases was Hess—for $8,000 per net acre. The overall deal between Chesapeake, EnerVest and the unnamed company is a bit complicated (see the press release below), but the gist of the matter is that Chesapeake will get enough money to fully fund their Utica Shale drilling program in Ohio, and the overall value of the joint venture means Chesapeake will eventually receive $3.4 billion.

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