(New throughout, adds comment from Kimmeridge)
Feb 21 (Reuters) - Chemical maker INEOS is entering into U.S. oil and
gas production for the first time, agreeing to purchase assets in South Texas
from Chesapeake Energy Corp for $1.4 billion, the companies said on
Tuesday.
The deal would give INEOS, run by billionaire businessman Jim Ratcliffe,
access to the natural gas that is key to its core business at a time of
significant disruption in global gas markets caused by Russia's invasion of
Ukraine.
"Over the last two decades, U.S. onshore oil and gas production has provided
security of supply for the global market and competitive advantage for U.S.
industry," Brian Gilvary, chairman of INEOS Energy, said in a statement.
"We believe this acquisition will help us to serve our internal and external
customers today as we continue to position our business to meet the energy
transition."
The transaction, involving an area of around 172,000 net acres with average
net daily production of about 36,000 barrels of oil equivalent, will also grant
Chesapeake Energy a complete exit from the Eagle Ford shale basin.
The Oklahoma City-based energy producer, under pressure from activist
investment firm Kimmeridge Energy Management to shift toward solely producing
natural gas, had already agreed to sell part of its position in January to
privately owned Wildfire Energy for $1.43 billion.
Mark Viviano, managing partner of Kimmeridge's public investment team, said
in a separate statement it commended the company's move and the re-focus on
low-cost gas assets would "maximize value for Chesapeake stakeholders".
Chesapeake said in its own statement the company would receive $1.175
billion at closing - due in the second quarter of this year - and a further $225
million in four annual installments. Proceeds from the deal will be used to
repay debt and fund its share repurchase program.
(Reporting by David French in New York and Arshreet Singh in Bengaluru; Editing
by Shailesh Kuber and David Gregorio)
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