China and Chesapeake: First Texas' Eagle Ford, now Wyoming/Colorado Niobrara

China continues to increase its presence in the US oil patch.

CNOOC, China's state-owned oil and gas company, bought a one-third stake in Chesapeake Energy's Niobrara play in northeast Colorado/southeast Wyoming. CNOOC paid $570 million to operate the 800,000-acre project in two basins in the Niobrara. [This deal closed Wednesday, February 16, 2011.]

CNOOC will pay two-thirds of the drilling costs, up to an additional $697 million.  The total would be about $1.3 billion.

This is the second deal in recent months in which China has bought into America's oil patch. The first was back in October (2010) in which CNOOC paid $1 billion for a one-third stake in Chesapeake's project in the Eagle Ford, south Texas.