WASHINGTON: China Petroleum and Chemical Corp. (Sinopec) will buy a 50 percent stake in Chesapeake Energy, the US second-largest gas producer after Exxon Mobil, in oil and natural gas-rich land in Oklahoma for $1.02 billion.
Sinopec, Asia's largest oil refiner, will buy 50 percent of Chesapeake's 850,000 acres of net oil and natural gas leasehold properties in the Mississippi Lime shale field in northern Oklahoma, the companies said.
The Mississippi Lime assets will be bought by Sinopec International.
Chesapeake has about 2.1 million net acres of leasehold in the Mississippi Lime region, which straddles northern Oklahoma and southern Kansas.
The joint venture between Sinopec and Chesapeake produced about 34,000 barrels of oil equivalent per day in the 2012 fourth quarter and, as of Dec. 31, 2012, there was approximately 140 million barrels of oil equivalent of net proved reserves associated with the assets, Chesapeake said.
About 45 percent of the total output was oil, 46 percent was natural gas and the rest was natural gas liquids.
Sinopec's deal with Chesapeake will help the Oklahoma City-based company cut down its debt, which stood at $12 billion as of December 31.
Chesapeake, which closed $12 billion of asset sales last year, is targeting asset sales of $4 billion to $7 billion in 2013, the company said in a presentation earlier this month. (QNA)