This excerpt taken from the CHK 8-K filed Oct 16, 2006.
NATURAL GAS FROM ALABAMA SHALES
BIRMINGHAM, ALABAMA AND OKLAHOMA CITY, OKLAHOMA, OCTOBER 16, 2006 - Energen Resources Corporation, the oil and gas subsidiary of Energen Corporation (NYSE: EGN), and Chesapeake Energy Corporation (NYSE: CHK) today jointly announced that Energen Resources has sold a 50 percent interest in its lease position in various shale plays in Alabama to Chesapeake for cash and a carried drilling interest. In addition, the two companies have signed an agreement to form an area of mutual interest (AMI) to focus on the further exploration and development of these shale plays throughout Alabama.
Energen Resources received $75 million in cash from Chesapeake for a 50 percent interest in Energen Resources existing shale lease position of approximately 200,000 net acres in Alabama. Chesapeake also will pay for Energen Resources first $15 million of future drilling costs. For at least the next ten years, the two energy companies will partner on a 50-50 basis on new leases, development and operations in the AMI. The purchase is subject to post-closing and other adjustments.