Take a look at this month’s edition of The Land Report newsletter, and you’ll see a wide array of opportunities to invest in land. From the pastoral – Virginia’s horse country – to the nitty gritty – Fayetteville shale gas interests – and of course the time-tested returns of Midwest farmland, land’s appeal as a tangible commodity continues to rise. No doubt this trend will only strengthen thanks to John Malone’s January purchase of more than 1 million acres, primarily in Maine but also in New Hampshire, the biggest transaction in decades.

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1. Land Report Top Ten – February 2011From the Lone Star State to Hawaii and the Atlantic...

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.

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A huge buying opportunity, which is exactly what Norway’s StatoilHydro did when they paid Oklahoma City-based Chesapeake Energy (NYSE:CHK) $1.25 billion in cash for a 32.5 percent interest in its assets in the Marcellus Shale, the natural-gas field that extends from western New York south and west across Pennsylvania to West Virginia. Statoil also committed to spend an additional $2.13 billion to offset Chesapeake’s drilling expenses. Here’s the full release from Chesapeake’s website announcing the deal on November 11:

Chesapeake Energy Corporation Announces Marcellus Shale Joint Venture and International Unconventional Natural Gas Exploration Alliance with StatoilHydro

OKLAHOMA CITY–(BUSINESS WIRE)–Nov. 11, 2008–Chesapeake Energy Corporation (NYSE:CHK) today announced the execution of an agreement for a joint venture with StatoilHydro (NYSE:STO, OSE:STL) whereby StatoilHydro will acquire a 32.5% interest in Chesapeake’s Marcellus Shale assets in Appalachia for $3.375 billion, leaving Chesapeake with a 67.5% working interest. The assets include approximately 1.8 million net acres of leasehold, of which StatoilHydro will own approximately 0.6 million net acres and Chesapeake will own approximately 1.2 million net acres.

StatoilHydro will pay $1.25 billion in cash at closing and will pay a further $2.125 billion from 2009 to 2012 by funding 75% of Chesapeake’s 67.5% share of drilling and completion expenditures until the $2.125 billion obligation has been funded. Chesapeake plans to continue acquiring leasehold in the Marcellus Shale play and StatoilHydro will have the right to a 32.5% participation in any such additional leasehold.

Additionally, Chesapeake and StatoilHydro have agreed to enter into an international strategic alliance to jointly explore unconventional natural gas opportunities worldwide. Closing of the transaction and strategic alliance is anticipated to occur by year-end 2008.

Helge Lund, President and CEO of StatoilHydro, stated, “I am pleased that we today have made a strategically important move by joining forces with Chesapeake, which is the leading U.S. natural gas player. We are establishing a strong platform for further developing our gas value chain business and growing our position in unconventional gas worldwide. The agreement we have entered into with Chesapeake provides us with a solid position in an attractive long-term resource base under competitive terms. Additionally, this deal adds a major building block to the gas value chain position we have established in the U.S., the world’s largest and most liquid gas market. This is a significant step in strengthening our U.S. gas position, building on our existing capacity rights for the Cove Point LNG terminal, our gas trading and marketing organization and the gas producing assets in the Gulf of Mexico.”

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are honored to establish a business relationship with StatoilHydro and are excited about the mutually beneficial nature of our transaction with them. We believe this transaction creates substantial value for both companies and unique opportunities for international growth with one of the leading international oil and gas companies. Jointly we can export our world class unconventional natural gas technology for further long-term growth.

“Chesapeake has now completed three shale joint ventures that collectively value Chesapeake’s Haynesville, Fayetteville and Marcellus Shale assets (before the joint ventures) at approximately $34 billion. Through these transactions, Chesapeake sold a 20% working interest in its Haynesville Shale assets to Plains Exploration & Production Company (NYSE:PXP) for $3.3 billion (thereby retaining an 80% working interest valued at $13.2 billion), a 25% working interest in its Fayetteville Shale assets to BP America (NYSE:BP) for $1.9 billion (thereby retaining a 75% working interest valued at $5.7 billion) and now has agreed to sell a 32.5% working interest in its Marcellus Shale assets to StatoilHydro for $3.375 billion (thereby retaining a 67.5% working interest valued at $7.0 billion). The total consideration to CHK from these sales has been approximately $8.575 billion, of which approximately $4.0 billion has been (or will be) in cash and approximately $4.575 billion is in drilling and completion cost carries. Furthermore, CHK retains the remaining ownership percentages of the joint ventures that have been valued at approximately $26 billion, or over $40 per share of value from just these three shale joint venture transactions. These joint ventures clearly demonstrate the enormous value of Chesapeake’s shale natural gas assets and the unique capability of our organization to develop them.”

Chesapeake was advised on the transaction by Jefferies Randall & Dewey of Houston, Texas.

Chesapeake Energy Corporation is the largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States. Further information is available at www.chk.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Chesapeake believes that its expectation to close the Marcellus Shale joint venture and international strategic alliance and to execute its development plan as described is based on reasonable assumptions. No assurance, however, can be given that such expectation will prove to have been correct. See “Risk Factors” in the company’s 2007 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the 2008 third quarter and other filings with the Securities and Exchange Commission for a discussion of risk factors that affect its business and could affect the referenced joint venture and strategic alliance. Chesapeake undertakes no obligation to publicly update or revise any forward-looking statements.

CONTACT: Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
Senior Vice President -
Investor Relations and Research
jeff.mobley@chk.com
or
Marc Rowland, 405-879-9232
Executive Vice President
and Chief Financial Officer
marc.rowland@chk.com
SOURCE: Chesapeake Energy Corporation

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BY STEPHEN O’KEEFE, CFA

Not all of us are ready yet to retire from urban life and spend all our time at our ranches, our beach homes, our hunting lodges, and our lake houses, but there’s no reason for our fields to lie fallow, so to speak. One way or another, there’s money to be made.

By buying stock in a wide range of businesses, you can participate in and profit from the land game without ever stepping foot on a piece of property. There’s the obvious, of course: timber, mining, petroleum, agriculture. But that just scratches the surface. Peek inside for an introduction to the myriad ways you can increase your land portfolio without once getting your hands dirty. As investments go, raw land can be rock solid.

But how can you profit from the increasing demand for ethanol if you don’t already own in the Corn Belt? What’s the best way to catch some upside when millions of acres of timberland are sold off? Simple. Diversify your portfolio. From the nation’s largest private landowner to Colorado’s biggest ski mountain and California’s biggest ranch, these publicly traded securities are all about land.

TRC
Tejon Ranch Company
LEBEC, CA. With more than 270,000 acres, TRC owns the largest expanse of private land in California. The ranch is located approximately 60 miles north of Los Angeles. TRC generates about half of its revenue from real estate operations and the other half from farming. Revenues have grown 10 percent per year since 2003.

PCH
Potlatch Corporation (REIT)
SPPOKANE, WA. PCH owns and manages 1.5 million acres of timberland in Arkansas, Idaho, Minnesota, Wisconsin, and Oregon. This stock converted to a Real Estate Investment Trust (REIT) structure in 2006 and may be best suited to income-oriented investors. PCH reviews its land holdings to see which parcels have high non-tim-berland values and are candidates for sale using the Section 1031 exchange program to minimize capital gains taxes.

PCL
Plum Creek Timber
SEATTLE, WA. Plum Creek has more than 8 million acres in major timber-producing regions of the United States, making it the largest and most geographically diverse private landowner in the nation. Management has acquired hundreds of thousands of acres in the last 15 years and is identifying where sales or development can be made. PCL has an attractive 4 percent yield.

WY
Weyerhauser
TACOMA, WA. An international forest products giant with sales of $21.9 billion in 2006, WY is under pressure to unlock shareholder value by restructuring its timber-lands into a REIT for more favorable tax treatment.

MTN
Vail Resorts
BROOMFIELD, CO. Skier visits were up this year, and so were lift ticket prices. MTN operates numerous ski resorts, including Vail, Breckenridge, Keystone, and Beaver Creek-and has a majority interest in RockResorts. A growing segment for MTN is real estate operations, which contributed less than 10 percent of 2006 earnings but look like a good source of future earnings growth.

SWC
Stillwater Mining Co.
BILLINGS, MT. The recent spike in platinum prices has been a boon to this Montana mining company, which refines and markets palladium, platinum, and associated metals. Both of the company’s mines (Stillwater Mine, near Nye, Montana, and the East Boulder Mine near Big Timber, Montana) are located on the geological formation known as the J-M Reef. Norilsk Nickel owns about 55 percent of shares.

CHK
Chesapeake Energy Corporation
OKLAHOMA CITY, OK. As natural gas goes, so does CHK. The prospects for a rebound in prices have propelled shares of the country’s third largest independent producer. Headquartered in Oklahoma City, the company focuses on exploratory and developmental drilling as well as acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex, and Appalachian Basin.

CWEI
Clayton Williams Energy
MIDLAND, TX. Want to throw in with one of the country’s most successful wildcatters? Clayton Williams Jr. is not your typical oil man. He owns an interest in more than 6,000 oil and gas wells, primarily in Texas, Louisiana, and New Mexico. He’s also made a name for himself as a cattleman and ranks No. 59 on this year’s Land Report 100.

TIN
Temple-Inland Inc.
AUSTIN, TX. The company owns or leases 1.8 million acres of timberland in Texas, Louisiana, Georgia, and Alabama. Pressure from financier Carllcahn is triggering a restructuring plan with TIN retaining its lumber mills and manufacturing and spinning off its Forestar Real Estate Group and its Guaranty Federal division, which has substantial presence in the highly desirable Texas and California markets.

GMTN
Gander Mountain
SAINT PAUL, MN. Like gear? Gander Mountain likes you. The company’s 105 outdoor lifestyle stores in 22 states specialize in hunting, fishing, camping, marine, and outdoor lifestyle products and services. It is poised to open 9 more stores this fall.

ADM
Archer Daniels Midland Company
DECATUR, IL. Eager to cash in on ethanol? Then take a look at this Illinois giant, which was founded in 1902. ADM processes foodstuffs: soybeans, wheat, cocoa, and that new yellow gold-corn. It has good exposure to the growing use of ethanol as a fuel (biodiesel too), but with more than 5 billion gallons of capacity in North America, the additional 4.5 billion gallons of planned construction may put a lid on ethanol’s rising price.

DE
Deere & Company
MOLINE, IL. Here’s another way to ride the ethanol boom. DE has grown from a one-man blacksmith shop in 1837 into a global corporation that now employs approximately 47,000 people. Soaring ethanol prices have spiked demand for equipment from this industry leader.

BTU
Peabody Energy Corporation
ST. LOUIS, MO. Peabody owns a majority interest in mines located throughout most major U.S. coal-producing regions. Transportation bottlenecks have dampened earnings, but rail carriers are increasing capacity, particularly in the western U.S. PS. Thanks to their Australian mines, BTU also has good exposure to the burgeoning China and Pacific Rim markets. Earnings prospects are good.

DEL
Deltic Timber Corp.
EL DORADO, AR. DEL sells its lumber products to truss manufacturers and wholesalers and is a good way to participate in the eventual rebound in homebuilding. The company owns almost 440,000 acres of timberland, primarily in Arkansas and Louisiana, and it also develops real estate in Arkansas.

ICO
International Coal Group
SCOTT DEPOT, WV. ICO has more than 1 billion tons of coal (metallurgical quality and steam) in its reserves and has idled about 1.7 million tons of high-cost production, shifting production focus to lower-cost mines. If oil prices stay high, then coal and ICO should remain attractive.

JOE
The St. Joe Company
JACKSONVILLE, FL. Ever heard of the term snowbird? JOE has. Florida’s largest owner of private land (approximately 800,000 acres) is also one of the state’s largest real estate development companies. Northwest Florida remains an attractive location for retirees, and JOE’s 3-5 year prospects are equally attractive.

RYN
Rayonier (REIT)
JACKSONVILLE, FL. Rayonier is a forest products company that converted to a REIT in 2004. It owns or manages 2.7 million acres of timberland in the United States and New Zealand. Its specialty fibers group products are used in pharmaceuticals, LCD screens, and industrial processes. And thanks to long-term contracts for 80 percent of production, RYN is poised to weather a weak housing market.

WTR
Aqua America Inc.
BRYN MAWR, PA. WTR is the holding company for regulated utilities that provide water and wastewater services to customers in 13 states. The company received rate increases in 2006 and is expected to receive more in 2007, adding to revenues and earnings.

ROAC
Rock of Ages Corporation
GRANITEVILLE, VT. A vertically integrated granite quarrier, manufacturer, and retailer, ROAC has built its business on granite memorials. The company owns and operates 10 active quarry properties and 5 manufacturing and sawing facilities, predominantly in Vermont and Quebec. It also has 81 company-owned stores in 14 states.

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