Chesapeake’s Largest Shareholder Says: Consider Selling

for sale signYesterday, the largest outside shareholder of Chesapeake Energy stock (with 13.6 percent)—Southeastern Asset Management—sent a letter to CEO Aubrey McClendon and the board of directors with a loud and clear message: “We urge the board to be open to any offers to acquire the whole company.” Ouch. Not exactly a ringing endorsement. The letter also included some other “friendly” advice on how Chesapeake ought to be running its business (gotta love those investors, eh?).

Here’s the entire letter, as filed with the Securities and Exchange Commission:

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SRBC “Insists” Drillers Use Acid Mine Water if Possible

An idea that’s been floating “out there” for some time, at least in Pennsylvania, is for gas drillers to use acid mine water that flows from abandoned coal mines. It’s estimated there is some 300 million gallons per day of acid mine water—more than enough to frack every well drilled in PA each year. Last year, Gov. Tom Corbett’s Marcellus Shale Advisory Commission recommended that the state Department of Environmental Protection set up an approval process to make it happen—something now in the works.

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MarkWest Buys Keystone Midstream for $512M

Pipeline giant MarkWest has just gobbled up another, albeit much smaller, competitor. MarkWest announced yesterday it is purchasing Keystone Midstream for $512 million. Keystone is owned by Stonehenge Energy Resources and Rex Energy with operations primarily in Butler County, PA.

As part of the deal, MarkWest will gain contracts and a partnership with Rex Energy and Sumitomo Corporation to transport and process their rapidly expanding production in the liquids-rich portion of the Marcellus Shale in Butler and Beaver counties in Pennsylvania. MarkWest and Rex are also exploring a deal for Utica Shale production in eastern Ohio.

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MarkWest Inks Two New Deals to Expand Processing in WV

MarkWest has been in the news a lot lately, signing a raft of new agreements and even buying out a competitor. Last Friday, MarkWest announced they had signed an agreement (terms not disclosed) to expand MarkWest’s processing capacity in the Marcellus Shale to handle more Chesapeake production. The areas covered by the agreement include northern West Virginia (Brooke, Ohio and Marshall counties), and Washington County in Pennsylvania.

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