Chesapeake Acquires Field, Completes Well

THE JOURNAL RECORD, December 8, 1999 | Go to article overview

Chesapeake Acquires Field, Completes Well


OKLAHOMA CITY (JR) -- Chesapeake Energy on Tuesday announced that it has acquired the Chitwood Field in southern Oklahoma.

The Oklahoma City-based company also said it completed its initial exploratory well in the field.

Chesapeake paid privately owned Ward Petroleum $34.8 million to acquire an estimated 61 billion cubic feet of proved natural gas equivalent reserves that have a reserves to production ratio of 10 years and a projected remaining reserve life of 50 years.

The acquisition was paid for with cash on hand and borrowings from Chesapeake's bank facility.

"We are very pleased to have successfully consolidated the remaining interests in a field we attempted to acquire for many years, first from Mobil and later from Brigham Exploration Co. and Ward, who acquired the field from Mobil in 1997," said Aubrey K. McClendon, Chesapeake's CEO. "This type of transaction is indicative of our Mid-Continent acquisition strategy -- concentrate on acquiring controlling positions in fields where majors have been active for decades and as a result where substantial upside opportunities exist.

"As the majors' exodus from the Mid- Continent continues, Chesapeake looks forward to continuing to build on our extensive land position and high quality geological and seismic databases to increase our Mid-Continent reserves and production."

Chesapeake's first well drilled on the acquired property, the Wilber 2-29, is indicative of the company's expectations for the future development of this prolific field, he said. The discovery well was completed in the Simpson formation last week and is flowing 4.1 million cubic feet of natural gas and 450 barrels of oil per day, for a gas equivalent rate of 6.8 million cubic feet equivalent per day.

The Chitwood Field is located in Grady County and was discovered by Mobil Oil in 1947. Owned by Mobil for 50 years, the field contains what the Chesapeake believes to be the single most productive oil well ever drilled in Oklahoma, the Craddock 1-33, which has produced 3.3 million barrels of oil and 30.1 billion cubic feet of gas since its discovery in 1962.

In addition to operational control and additional working interest in the Wilber 2-29, Chesapeake acquired operations of 18 wells with an average working interest of 81 percent and current production of 10 million cubic feet equivalent per day including the Wilber 2-29. …

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