Big sale for Chesapeake

Article Excerpt

CHESAPEAKE ENERGY $21.45 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chkenergy.com; Shares outstanding: 753.0 million; Market cap: $16.2 billion; Dividend yield: 1.6%) is forming a second joint venture with major French oil firm Total S.A. In early 2010, Chesapeake sold a share of its Barnett Shale acreage in Texas to Total for $2.25 billion. Shale oil and shale gas are trapped in rock formations. To extract them, companies must pump water and chemicals into the rock. This fractures the rock and releases the oil or gas. Under this new deal, Total will buy a 25% stake in roughly 619,000 exploration acres in the Utica Shale area of Ohio. Total will pay Chesapeake $610 million for its share of the acreage, plus $1.42 billion in development costs. Chesapeake expects to receive the full amount by the end of 2014. Chesapeake is still a buy. buy…

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