Deutsche Bank Is Bullish On Chesapeake's (CHK) JV Deal

This morning Chesapeake Energy (NYSE: CHK) announced a joint venture on its Marcellus Shale property with an alliance with StatoiHydro. StatoilHydro will acquire 32.5% interest in the Chesapeake's Marcellus Shales assets in Appalachia for $3.375 billion, leaving Chesapeake with a 67.5% working interest.

Deutsche liked the news Chesapeake announced today and believes that Chesapeake has now taken out its basis--yet retains a 68% to 80% interest in the original leasehold. Deutsche said this deal gets Chesapeake halfway to its targeted Q4 cash raise of $2.5 to $3.0 billion, which in Deutsche's opinion alleviates concerns surrounding Chesapeake's near-term cash burn rate.

Deutsche also believes Range Resources (NYSE: RRC), Exco Resources (NYSE: XCO) and Equitable Resources (NYSE: EQT) are beneficiaries of today's news because of their exposure to the Marcellus Shale.

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