Chesapeake Closes On JV With Sinopec

Closed on its joint venture in northern Oklahoma.

Chesapeake Energy Corporation (NYSE:CHK) has closed on its previously-announced joint venture with in the Mississippi Lime with Sinopec International Petroleum Exploration and Production Corp.

Chesapeake announced in early March that it would sell a 50% undivided interest in about 850,000 acres in northern Oklahoma for about $1.02 billion in cash, of which approximately 93% was received upon last week’s closing. Payment of the remaining proceeds is subject to customary post-closing contingencies.

Sinopec’s joint venture includes about 9,600 barrels of liquids and 54 million cubic feet (MMcf) of natural gas per day during the 2013 first quarter. All future exploration and development costs in the joint venture will be shared proportionately between the parties with no drilling carries involved. As the operator of the project, Chesapeake will conduct all leasing, drilling, completion, operations and marketing activities for the joint venture.

Chesapeake chief executive Doug Lawler said the company plans to with Sinopec as a partner “for many years to come.”

Jefferies & Co. Inc. served as financial advisor to Chesapeake on the joint venture.