* Shares up 5.8 percent
* Analysts see per acre price dropping
(Adds analyst comment; updates share activity)
HOUSTON Jan 31 The shares of Chesapeake Energy
Corp (CHK.N) rose nearly 6 percent on Monday on news the U.S.
natural gas company struck a $1.3 billion shale deal with
Chinese oil producer CNOOC Ltd (0883.HK).
On Sunday, Chesapeake said it sold a stake in an oil-rich
shale deposit located in parts of Wyoming and Colorado to
CNOOC, its second such deal with the Chinese company in about
four months [ID:nN30170001].
The deal in the Niobrara shale fields will allow
Chesapeake, which has struggled to generate cash because of
weak natural gas prices, to fund its drilling program and boost
its output of liquids.
Analysts said Chesapeake seemed to be pushing hard for such
partnerships to avoid issuing new shares or debt and noted the
new joint venture, its sixth such partnership, appeared to be
generating less cash than previous deals.
"The deal is the smallest both in terms of total proceeds
and dollars per acre," Daniel Pratt, an analyst with
Ticonderoga Securities said in a note to investors.
Chesapeake shares were up 5.8 percent at $28.92 in midday
trading on the New York Stock Exchange.
(Reporting by Anna Driver and Matt Daily in New York; editing
by Lisa Von Ahn and Andre Grenon)