New Delhi: State-owned Oil India Ltd (OIL) is in talks to buy a stake in Chesapeake Energy Corp's Mississippi Lime unconventional oil assets in Oklahoma.
Chesapeake CEO Aubrey McClendon on February 14 made a presentation to OIL management on possible stake sale in its unconventional liquid rich carbonate play, sources privy to the negotiations said.
The Mississippi Lime play in northern Oklahoma is a conventional if somewhat complex carbonate reservoir that is rich in oil and natural gas liquids (NGL) like butane.
Chesapeake Energy is a Fortune 500 company with a market capitalisation of USD 37 billion and is the second largest producer of natural gas and 12th largest producer of liquid hydrocarbons in the USA.
It is looking at stake sale in its unconventional liquid-rich Mississippi Lime play covering 2 million acres.
The introduction of the unconventional development business model is turning the Mississippi Lime into the hottest new play in North America, sources said OIL was examining the offer made by Chesapeake.
Sources said OIL is planning to explore oil and gas opportunities in America in tie up with US companies. The company has been for some years scouting for overseas E&P assets, primarily discovered or producing properties.
OIL is also considering a proposal put by Jim Finley, Chief Executive Officer of Finley Resources Inc (FRI) last year for jointly pursuing E&P opportunities in the US.
FRI operates more than 900 oil & gas wells and has working interest in more than 2,500 non-operated oil & gas wells across 9 states in the US.
OIL has in internally evaluated some of the opportunities forwarded by FRI and the company feels the idea of jointly evaluating and pursuing acquisition opportunities along with FRI would allow OIL with some leverage in entering the US through their already existing network and capability in evaluating the right kind of asset.
OIL would send a high level team to carry out preliminary discussion with the management of both FRI and Chesapeake Energy on the way forward for the proposed acquisition opportunities and to pave the way for possible entry to the unconventional plays in USA, they added.