UPDATE 3-Chesapeake adding Utica shale acres, shares up
* Shares rise 4.1 percent
* Also planning joint venture for Mississippi lime
* Chesapeake says Utica value $20 bln (Adds comment from Chevron. updates shares)
By Anna Driver
HOUSTON, July 29 (Reuters) - Chesapeake Energy Corp (CHK.N) is continuing to buy acreage in the Utica Shale, a basin that the company expects to drive production growth of oil and liquids-rich natural gas, the company's chief executive said on Friday.
"We're quite confident about the play," Chesapeake CEO Aubrey McClendon told analysts on the company's second-quarter earnings call.
Investors had eagerly anticipated details on Chesapeake's activity in the Utica and the company's shares were up just over 4 percent in afternoon trade.
Chesapeake, the second largest U.S. producer of natural gas, said on Wednesday it had acquired 1.2 million acres in the eastern Ohio shale prospect at a cost of $2 billion and is looking for ways to wring value from its position there. [ID:nN1E76R1MO]
Citing competitive reasons, McClendon declined on the call to provide details about Utica production or reserve estimates. The company pegged the value of its Utica position at $15 billion to $20 billion.
Analysts at Houston-based investment bank Tudor Pickering Holt & Co said the Utica was "potentially the big kahuna" for Chesapeake, but said investors would like more details.
Chevron Corp (CVX.N), which acquired 600,000 Utica acres through its $3.2 billion purchase of Atlas Energy, said on its earnings call on Friday that there are still many unknowns about the basin.
George Kirkland, Chevron's vice president told analysts that it was a "little bit too soon to conclude on the potential of the Utica," adding that Chevron needed to drill wells to evaluate the basin's potential.
Chesapeake has also amassed more than 1 million acres in a basin called the Mississippi lime in Oklahoma. The company is planning a joint venture for the Mississippi lime that is expected in the first half of next year, McClendon told analysts.
Shares of Oklahoma City, Oklahoma-based Chesapeake rose $1.37 to $34.80 in morning New York Stock Exchange trading, outperforming the ARCA index of natural gas companies .XNG that was down 0.4 percent. (Reporting by Anna Driver; Additional reporting by Braden Reddall in San Francisco, editing by Gerald E. McCormick, Dave Zimmerman and Tim Dobbyn)
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