Chesapeake Energy Corp. has acquired or agreed to acquire about 8,500 net undeveloped acres in the heart of the Barnett Shale play in Tarrant County, TX, from Four Sevens Resources Co. Ltd., Sinclair Oil & Gas Co. and several of their affiliates and partners, the company said Monday.

The company also said Four Sevens and Sinclair have agreed to work on an exclusive basis in certain areas of Tarrant County to acquire leases on Chesapeake’s behalf. This complements a similar agreement Chesapeake has in place with Dale Property Services LLC covering different portions of Tarrant County.

Including these land service agreements and its own landmen and lease brokers, Chesapeake now has more than 750 landmen and lease brokers dedicated to acquiring additional undeveloped leasehold and surface drillsites in Tarrant County. Chesapeake said it should be able to continue acquiring at least 30,000 net leasehold acres per year in what is quickly becoming the most prolific county in the Fort Worth Barnett Shale play. This anticipated yearly addition to leasehold inventory should provide up to an additional 500 drill sites per year, more than offsetting the number of wells Chesapeake plans to drill each year in Tarrant County.

The Fort Worth Barnett Shale leasehold position held by Chesapeake now totals approximately 220,000 net acres, including approximately 180,000 net acres in the Core and Tier 1 area “sweet spot” of Johnson, Tarrant and western Dallas counties. On this acreage, Chesapeake is now producing approximately 335 gross MMcfe/d (230 net MMcfe/d) from approximately 400 gross wells, of which Chesapeake has drilled approximately 265 and has acquired 135. The company is currently drilling 32 wells and has an additional 95 wells awaiting completion or pipeline connection.

Last year Chesapeake picked up 39,000 net acres of Barnett leasehold in Johnson and Tarrant counties, 30 MMcfe/d of current production and $55 million worth of midstream assets in an $845 million cash deal with Four Sevens Oil Co. Ltd. and its partner Sinclair Oil Corp. Chesapeake also spent $87 million to buy 28,000 net acres in the same area from other sellers (see Daily GPI, June 6, 2006). In May Chesapeake began drilling its first well at Dallas/Fort Worth International Airport (see Daily GPI, May 23).

Last week it was reported that Shell Exploration and Production Co. was selling its Barnett stake (see Daily GPI, July 2). Nevertheless, production from the Barnett by Chesapeake and other producers is having an impact on natural gas markets, according to NGI’s quarterly ranking of top North American gas marketers (see Daily GPI, June 21).

Chesapeake said it believes it has the ability to drill approximately 2,700 additional net horizontal Barnett Shale wells with lateral lengths of approximately 3,000 feet on 500-foot average well spacing. The company’s expected results for wells drilled on its Core and Tier 1 acreage are $2.5 million to develop 2.45 gross Bcfe (1.8 net Bcfe after royalties and other burdens). In the second half of 2007, Chesapeake anticipates using 35-38 rigs to develop its leasehold and should be able to bring a new Barnett Shale well into production every 18 hours, on average.

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