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McClatchy-Tribune  06/10/2014 12:57 PM ET
McClendon companies spend $4.25 billion to acquire drilling acreage in Ohio, West Virginia, Texas [The Akron Beacon Journal :: ]

June 10--Energy wildcatter Aubrey McClendon announced Monday that his companies are spending $4.25 billion to enlarge drilling areas in Ohio and to buy acreage in West Virginia and Texas for the first time.

The purchases include 27,000 leased acres in Monroe County in southern Ohio's Utica shale region.

That land was acquired from Florida-based East Resources and a second, unnamed private company by American Energy-Utica LLC, a subsidiary of McClendon's Oklahoma-based American Energy Partners LP.

McClendon, the former CEO of Chesapeake Energy Corp., the No. 2 natural gas producer in the United States, formed his new company in April 2013 after being ousted from Chesapeake. His new company quickly has become a major player in the Utica shale.

"He's making bets on the same type of assets he did at Chesapeake," Oppenheimer analyst Fadel Gheit told SeekingAlpha.com. "The guy is consistent."

In a separate purchase, American Energy-Marcellus LLC, another McClendon firm, said it has signed agreements to acquire 48,000 acres in five northern West Virginia counties. That land also was acquired from East Resources and a second, unnamed private company.

The two purchases together totaled $1.75 billion, McClendon's companies said in a news release.

Both deals are expected to close within 60 days.

The sellers currently are using two drilling rigs on the Ohio and West Virginia land, and the McClendon companies plan to increase drilling activity to four to six rigs by late 2015.

The Utica acquisition marks the seventh that American Energy-Utica has made in Ohio and boosts its acreage to about 280,000 net acres in the state's eastern counties.

The company said that makes it the largest leaseholder in the still-developing southern Utica shale area.

American Energy says it has invested more than $3.5 billion in Ohio's Utica shale and plans to drill 2,600 gross wells and 1,560 net wells that it owns on its acreage in the years ahead.

The West Virginia purchase marks the initial foray by McClendon's companies into the southern Marcellus shale, which is found in Pennsylvania and northern West Virginia and is a gas-rich rock formation with little liquid.

A third McClendon company, American Energy-Permian Basin LLC, announced Monday that it was spending $2.5 billion to acquire 63,000 net acres in Texas from affiliates of Denver-based Enduring Resources LLC.

The purchase marks American Energy's entry into the Permian Basin.

Enduring has four rigs, and the McClendon company said it will increase drilling to six to eight rigs by late 2015.

In the past nine months, American Energy Partners and its affiliates have committed equity and debt capital totaling about $10 billion.

Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.

 

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