Total E&P USA has owned the remaining 25% in the Barnett assets since December 2009.
The pre-emption and related transactions are subject to a number of conditions which include third party consents and it is expected to close by the end of this year.
Barnett Shale’s assets that come under the proposed transaction will include about 215,000 net developed and undeveloped acres, leases, minerals and buildings. The net production for 2016 is approximately equal to 65,000 barrels of oil per day (boed).
The terms of the transaction state that Chesapeake will pay $334m to the gatherer and processor of 80% of the gas at Barnett assets, Williams, in order to terminate the gathering agreement, projected minimum volume commitment (MVC) shortfall payments and fees pertaining to Barnettt Shale assets.
In addition, Total will pay $420m to Williams for a fully restructured, competitive gas gathering agreement, which is free of any MVC and with a Henry Hub-based gathering rate instead of fixed per thousand cubic feet (mcf) fee.
It will also pay $138m to be released from three midstream capacity reservation contracts.
Total E&P USA president & CEO José Ignacio Sanz said: “Over the six years that we have been involved in the Barnett, we have gained an in-depth understanding of the play and the technology.
"With the new conditions created by the exit of Chesapeake and the associated restructuring of the midstream contracts, we believe that we can extract significant value from the substantial, well located resource base of the play by combining focused upstream operating efficiency, streamlined midstream contract management and marketing savvy through Total’s trading affiliate Total Gas & Power North America."
