Total said it would take a 25 percent stake in Chesapeake's Barnett Shale gas fields in Texas, paying $800 million in cash and providing $1.45 billion toward the fields' development over up to six years.
Analysts said the deal made strategic sense for France's largest company by market value and that the price was in line with recent transactions.
The deal highlights a disciplined approach to capital allocation and that M&A focus at Total remains more toward smaller 'bolt-on' asset acquisitions, as opposed to larger corporate deals, analysts at Morgan Stanley said in a research note.
Shares in Total were up 1.8 percent at 45.80 euros by 1231 GMT, just ahead of a 1.6 percent gain in the DJ Stoxx European oil and gas sector index .SXEP. Chesapeake shares rose 5.2 percent in premarket U.S. trade.
The deal follows similar investments by U.S. and European rivals in North American shale gas, which is harder and more expensive to extract than gas from traditional reservoirs.
Chesapeake has made similar tie-ups with BP (BP.L) and Statoil (STL.OL), in the past 18 months, while in December, the U.S.'s largest oil and gas company, Exxon Mobil (XOM.N) agreed to buy shale gas producer XTO Energy Inc (XTO.N) for about $30 billion.
The investments are spurred by confidence that growing demand for energy will boost gas prices from their current depressed levels, ensuring fat margins.
Also, Western companies are looking closer to home for investments as barriers to investment in resource-rich countries such as Russia, Saudi Arabia and Kuwait limit their options overseas.
The deal will give Total additional production of 30,000 barrels of oil equivalent per day of gas, and reserves of 130 million barrels of oil equivalent, with the possibility that additional drilling could prove up reserves twice this size.
This joint venture will provide us with a solid position in an attractive long-term resource base under competitive terms, Total Chief Executive Officer Christophe de Margerie said in a statement.
The CEO added the entry into the shale gas business would help Total develop expertise which could be used in developing unconventional gas reserves internationally and help it expand its position more broadly in the U.S. natural gas market.
However, shale gas production is facing growing scrutiny from regulators and tougher opposition from environmentalists, who say the fluids used to crack open gas-rich rocks can contaminate ground water.
Last week, the U.S. Environmental Protection Agency said it had serious reservations about allowing shale gas drilling in New York City's watershed, warning of a threat to the drinking water for 9 million people.
Total said it was conscious of the environmental risks but that it had confidence in Chesapeake's capacity to manage these.
Under the terms of the deal, Total will fund 60 percent of Chesapeake's share of drilling and completion expenditures until the end of 2012, Chesapeake said in a statement.
(Reporting by Marcel Michelson; Editing by James Regan, John Stonestreet)