Market Watch: Chesapeake Sells $2.16B Eagle Ford Stake

The China National Offshore Oil Corporation (CNOOC) has purchased a 33.3% undivided interest in Chesapeake Energy’s 600,000 net oil and natural gas leasehold acres in the Eagle Ford Shale in South Texas. The deal was CNOOC’s first to close in the U.S. since its failed 2005 Unocal bid.

Deal terms included $1.08 billion in cash, plus an additional $40 million payment adjustment at closing. CNOOC has also agreed to fund 75% of Chesapeake’s share of drilling and completion costs up to $1.08 billion, which Chesapeake expects to occur by year-end 2012.

Chesapeake CEO Aubrey McClendon, who also is a Land Report 100er, said , “We are very pleased to have partnered with CNOOC Limited in completing our fifth industry shale development transaction. We look forward to accelerating the development of this large domestic oil and natural gas resource, resulting in a reduction of our country’s oil imports over time, the creation of thousands of high-paying jobs in the U.S. and the payment of very significant local, state and federal taxes.”

On the Block: Aubrey McClendon’s 271 Ranch

Aubrey McClendon’s 271 Ranch goes on the block Thursday, August 5. The National Auction Group is handling the sale, which is scheduled for 11 a.m. (CST) at the ranch headquarters. Bidders can register beginning at nine o’clock. The 4,391-acre cattle ranch will be offered in five tracts and as a whole. Approximately 1,100 acres will be sold with no reserve.

The CEO of Chesapeake Energy, McClendon ranked No. 96 on the 2009 Land Report 100 with 98,106 acres. Of his Oklahoma properties, the 271 Ranch is farthest from his Oklahoma City base of operations. As the property he visits least frequently, he decided to liquidate the holding.

Located just two hours north of Dallas in prime whitetail country, the 271 Ranch includes the following:

• Pastures with Wells and Ponds
• Center Pivot Irrigation System with Well Powered by 3 Phase Electric
• Ground Water Rights
• 8 Cattle Working Locations with Catch Pens & Working Alleys
• 3 Locations with Loading Chutes for Semi Trucks & Trailers
• Stocker Receiving Facility with Capacity of 400 Head
• 6 Guest Homes
• Office/Shop Building Constructed in 2007
• 9-Stall Horse Barn
• 9 Additional Barns for Equipment or Hay Storage
• Pastures of Bermuda, Fescue, & Some Native Grasses
• 3± Miles of Frontage on U.S. Hwy. 271
• 7± Miles of County Road Frontage
• 15± Miles of New Fence Constructed in Last 3 Years
• Cattle Guard Access to Most Pastures

In addition to world-class whitetail hunting, the 271 Ranch is minutes from lakes of Sardis, McGee Creek, Pine Creek, Clayton, and Hugo. Stretching three miles along U.S. Highway 271, the property has seven miles of county road frontage with 15± miles of fencing.

The property will be open for inspection through Wednesday from 10 a.m. to 6 p.m. Call (800) 579-1174 or (256) 547-3434 to schedule an appointment.