Wrapping up its previously announced acquisition, Oklahoma City-based Chesapeake Energy Corp. said it has completed the purchase of Mid-Continent gas assets from a wholly-owned subsidiary of Tulsa-based Oneok, Inc. for $300 million.

First announced in November as a sale to an undisclosed company, Chesapeake Energy revealed in December that it was the mystery buyer of Oneok Resources’ Mid-Continent gas reserves (see Daily GPI, Nov. 26, 2002; Dec. 5, 2002).

Based on internal reservoir engineering estimates, Chesapeake said it believes that it has acquired approximately 200 Bcfe of proved gas reserves and approximately 60 Bcfe of probable and possible gas reserves. The acquired properties are expected to contribute approximately 47,000 Mcfe/d to Chesapeake’s continued production growth.

Chesapeake said it funded the acquisition with proceeds generated from the company’s successful December 2002 offerings of 23 million common shares at $7.50 per share and $150 million of 7.75% senior notes.

“The Oneok acquisition fits perfectly with our existing Mid-Continent assets and with Chesapeake’s business strategy of creating value by acquiring and developing low-cost, long-lived natural gas assets in the Mid-Continent region of the U.S,” said Chesapeake CEO Aubrey K. McClendon. “This transaction increases our company’s proved reserves to 2.4 Tcfe and our current production to over 565,000 Mcfe/d.

“Based on the results achieved from our previous acquisitions in the Mid-Continent, we expect to substantially increase the value of Oneok’s reserves through additional drilling, lower administrative costs and reduced operating costs,” McClendon added.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.