Sinopec to acquire Chesapeake's shale assets for $1.02 bn

Chinese oil giant China Petroleum & Chemical Corp, known as Sinopec, will acquire a 50-per cent stake in Chesapeake Energy Corp's Mississippi Lime oil and gas properties in Oklahoma and Kansas for $1.02 billion in cash.

The sale is part of The Oklahoma-based company's 2013 financial plan of raising around $4 billion to $7 billion in order to reduce debt and fund its ongoing operations.

The deal will give the Beijing-based state run company a 50 per cent interest in 850,000 of Chesapeake's net oil and natural gas leasehold acres in the Mississippi Lime play in northern Oklahoma.

Production from these assets averaged approximately 34 thousand barrels of oil equivalent per day in the 2012 fourth quarter with approximately 140 million barrels of oil equivalent of net proved reserves, estimated  at the end of December 2012.

Chesapeake will be the operator of the project and all future exploration and development costs will be shared proportionately between both companies.

The deal will allow Chesapeake to reduce its debt, which stood at $12 billion as of 31 December. The company already sold assets worth $12 billion last year.