BP America Inc. agreed to pay $1.75 billion in cash to acquire all of Chesapeake Energy Corp.'s interests in 90,000 net acres of leasehold and natural gas properties in the Arkoma Basin of the Woodford Shale.

The properties, which are in Oklahoma's Atoka, Coal, Hughes and Pittsburg counties, currently produce around 50 MMcfe/d. The transaction is set to close by Aug. 8.

"There was substantial industry interest in our Woodford Shale asset package," said Chesapeake CEO Aubrey McClendon. The sale "enables Chesapeake to redeploy capital to our Haynesville, Barnett and Marcellus shale plays and further improves the company's capital structure."

McClendon earlier this month hinted at the possibility of Chesapeake either selling or partnering on some of its domestic exploration and production (E&P) projects (see Daily GPI, July 7).

BP, noted McClendon, "has long had a leading position in the Oklahoma natural gas industry," and Chesapeake, which is based in Oklahoma City, may work with BP "on other projects in the future."

The BP plc subsidiary and Chesapeake already are jointly exploring the Anadarko Basin in a series of Deep Springer wells across a 155 square-mile area of mutual interest in Washita County, OK. "Our first well has been logged and looks excellent," McClendon said.

"This purchase is a strategic entry into an attractive and established shale basin with potential resources of up to 2 Tcf," said BP's Andy Inglis, CEO of the U.S. E&P unit. "It complements our extensive unconventional gas plays throughout North America."

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