Chesapeake Energy Corporation has completed its previously announced acquisition of Mid-Continent, Permian Basin, South Texas and onshore Gulf Coast natural gas assets from privately-owned Concho Resources Inc. for $420 million. In addition, the company has completed the previously announced acquisition of two smaller producing property packages totaling $90 million.
Based on internal reservoir engineering estimates, Chesapeake believes that through these three transactions it has acquired approximately 320 billion cubic feet of gas equivalent (bcfe) of proved gas reserves, approximately 195 bcfe of probable and possible gas reserves and current production of approximately 70 million cubic feet of natural gas equivalent (mmcfe) per day. The acquisitions were funded 60% with common equity issued in January 2004 and 40% from cash on hand and borrowings from the company's revolving bank credit facility.
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "We are pleased to announce the completion of another series of successful acquisitions of high-quality, long-lived natural gas assets. These acquisitions further strengthen our Mid-Continent stronghold and accelerate our growth in the Permian Basin, South Texas and onshore Gulf Coast areas. Chesapeake's proved reserves now exceed 3.4 trillion cubic feet of gas equivalent and our production should average 875 mmcfe per day for the first quarter of 2004 and 890 mmcfe per day for the entire year.
