CNOOC pays $1.08 billion for stake in Chesapeake shale project

Including drilling and completion costs, CNOOC commits in excess of $2 billion to an oil and gas project owned by Chesapeake Energy Corporation -- a deal in which only non-Wall Street banks have a role.

CNOOC, China’s largest producer of offshore crude oil and natural gas, will shell out $1.08 billion for a one-third interest in 600,000 net oil and natural gas leasehold acres in the Eagle Ford Shale project in south Texas, which is owned by Chesapeake Energy Corporation.

Hong Kong-listed CNOOC, which is 64%-owned by Chinese state-owned enterprise China National Offshore Oil Corporation, will also fund 75% of Chesapeake's share of drilling and completion costs. CNOOC’s additional funding is capped at $1.08 billion, which is expected to be spent by the end of 2012.

Oklahoma-based Chesapeake Energy Corporation is the second-largest producer of natural gas and an active driller of new wells in...

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