Chesapeake Could Sell Fayetteville Acreage to Chinese Firm

China's top state oil firm is considering placing a bid on acreage in the Fayetteville Shale Play, the South China Morning Post reports.

China National Petroleum Corp. could bid on a minority stake in acreage in Arkansas and Pennsylvania owned by Chesapeake Energy Corp. of Oklahoma City.

In a recent investor presentation, Chesapeake said it hoped to raise between $4.5 billion and $5 billion during 2008 through joint ventures. The presentation stated that Chesapeake was in discussions with "several potential partners" for land in the Fayetteville and Marcellus shale plays. The Marcellus Shale Play is located in New York, Pennsylvania and several other states in the Appalachian Mountains.

Chesapeake's presentation states that the company hopes to enter into a "PXP style" deal for 25 percent of its interest in the Fayetteville Shale Play.

Chesapeake announced a joint agreement on July 1 with Plains Exploration & Production of Houston. PXP agreed to pay $1.65 billion in cash for a 20 percent stake in Chesapeake's holdings in the Haynesville shale.

Chesapeake owns 585,000 net acres in the Fayetteville shale, according to the presentation.

Shares of Chesapeake (NYSE: %%CHK%%) were trading at $48.96 as markets opened Monday.