?BP America, Houston, a subsidiary of British major BP Plc, (NYSE: BP) plans to acquire a 25% interest in the Arkansas Fayetteville shale assets held by Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) for $1.9 billion.

BP will pay $1.1 billion in cash at closing and $800 million during the remainder of 2008 and in 2009 by funding 100% of Chesapeake’s 75% share of drilling and completion expenditures until the obligation is met. BP will have the right to a 25% participation in any additional Fayetteville shale leases acquired by Chesapeake.

The assets have current daily net production of approximately 180 million cu. ft. equivalent and include approximately 540,000 net acres. BP will own approximately 135,000 net acres and Chesapeake will own approximately 405,000 net acres. The companies believe the acreage could support up to 6,700 future horizontal wells.

In August, Chesapeake sold all of its Arkoma Basin Woodford shale assets in Oklahoma to BP for $1.7 billion.

Chesapeake chief executive Aubrey K. McClendon says, “We are honored to broaden our business relationship with BP and are excited about the mutually beneficial nature of our transactions with them… .We believe this transaction creates substantial value for both companies, highlights the attractiveness and significant value of Chesapeake’s assets and confirms the structural appeal of our innovative joint-venture structures.”

McClendon says this joint venture and a joint venture with Plains Exploration & Production Co., Houston, (NYSE: PXP) in July will pay for approximately $2.5 billion of Chesapeake’s drilling and completion expenditures planned for the second half of 2008 through 2010. Additionally, Chesapeake is pursuing a similar transaction involving its Marcellus shale assets that it expects to complete by year-end 2008, he says.

BP chief executive of exploration and production Andy Inglis says, “This transaction, when combined with our recent Woodford acquisition, establishes a material position in the two attractive shale plays in the Arkoma Basin. Together with our substantial position in the emerging Haynesville shale play in East Texas, BP has made a strategic entry into three top-tier shale plays in North America and established potential shale resources of 1 billion BOE net to BP.

“Development of these resources, along with our leading position in coalbed-methane production, and our extensive tight-gas plays throughout North America, will enhance BP’s position as a leader in unconventional gas technology and enable growth of our North American onshore natural gas production from today’s level of 470,000 BOE per day. We look forward to working closely with Chesapeake as they develop the significant Fayetteville play.”