2008-10-21-2008-10-21

To acquire 38K acres in Anadarko Basin Woodford shale in Blaine, Canadian counties, OK.

Cimarex Energy Co., Denver, (NYSE: XEC) plans to acquire 38,000 net acres in the Anadarko Basin Woodford shale in western Oklahoma from Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) for $180 million in cash. The assets include a 37.4% average working interest (84% net revenue interest) in 37,689 net acres in Canadian and Blaine counties in the Watonga-Chickasha trend. Ownership is distributed across 195 sections in 15 townships with a controlling interest in 46 units. Production is 536,000 cubic feet and eight barrels of oil per day net from 19 producing (four operated) horizontal wells. Estimated proved developed producing reserves are 2.4 billion cubic feet. Some 88% of acreage is producing or held by operations with lease terms beyond 2008 for more than 99% of net acreage. Woodford shale rights only were conveyed. Pro forma, Cimarex will have 88,000 net acres in the basin. Cimarex reports it has drilled or participated in 18 Anadarko-Woodford shale wells through the end of the third quarter. Eight additional wells are drilling with five operated. Thirty-day average initial production rates on Cimarex's Anadarko-Woodford wells with 4,000-foot laterals have averaged 5 million cubic feet per day. As of Sept. 30, Cimarex had more than $200 million in cash and $500 million available under its undrawn bank-credit facility. The effective date is Oct. 1. Meagher Oil & Gas Properties Inc. is advisor to Chesapeake.