Competition for the nation’s natural gas resources grew more heated on Monday as France's Total SA announced they would pay out $2.25 billion to Chesapeake Energy for rights to expansive fields in North Texas.
The deal arrives less than a month following the announcement by Exxon Mobil Corp. that it will purchase producer XTO Energy, in a $31 billion stock transaction. Furthering parallels with Exxon, Total too, has pledged to share the information it gains in the U.S. natural gas fields on a global level.
The international investment affirms the notion that the U.S. remains the forerunner in gas shales and that other nations are looking toward the United States as a model.
For $800 million cash, Total SA will gain 25 percent interest in Chesapeake's Barnett shale with the added $1.45 billion being put toward the payment of 60 percent of Chesapeake's share of drilling and completion costs.
The investment is likely a smart one for Total, the globe’s fifth largest energy company, as technology to unlock gas from shale has grown exponentially. In the past two years, the amount of available fuel has risen 35 percent with estimates predicting fuel use at its current level could be sustained for more than a century with the new additions.
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About EQUITIES:
Since 1951, EQUITIES Magazine has been a leading media company providing business editorial content designed to serve the needs of business leaders, professionals, institutional investors and retail investors. We are focused on business and the business of making money, not on lifestyle subjects. We publish original reporting in print and on the Internet at www.equitiesmagazine.com, as well as select content at www.nasdaq.com. For 28 years we have hosted our own branded investor conferences that connect public company CEO’s with our loyal readers in the investment community.
Sign up for a free one-year subscription to EQUITIES Magazine.
