Chesapeake Energy establishes Mississippi Lime JV with Sinopec

US-based Chesapeake Energy has completed the formation of the Mississippi Lime joint venture (JV) with China-based Sinopec International Petroleum Exploration and Production.

In a press statement, Chesapeake said it has sold a 50% undivided interest in about 850,000 acres in northern Oklahoma for $1.02bn in cash.

The assets related to the JV produced about 9,600 barrels of liquids and 54 million cubic feet of natural gas per day in this year’s first quarter.

As the operator of the JV, Chesapeake will carry out all leasing, drilling, completion, operations and marketing activities, while the costs will be shared proportionately between both the parties.

Chesapeake Energy CEO Doug Lawler said: "Chesapeake is pleased to have Sinopec as our partner in the Mississippi Lime play and we look forward to efficiently developing and growing this asset for many years to come."

Chesapeake has natural gas and oil assets in the Eagle Ford, Utica, Granite Wash, Cleveland, and Tonkawa plays.

The company also has assets in the Mississippi Lime and Niobrara unconventional liquids plays, as well as in the Marcellus, Haynesville/Bossier and Barnett unconventional natural gas shale plays.

In September 2012, Chesapeake Energy signed multiple agreements to sell all of its midstream assets and certain non-core leaseholds located in the US Permian basin, for a total consideration of $6.9bn.

In October 2010, the company divested producing assets in the Barnett Shale to an affiliate of Barclays Bank for $41.15bn.

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Image: Sinopec headquarters in Chaoyang District, Beijing, China. Photo: courtesy of WhisperToMe.