Chesapeake’s Troubles Mean a Slowdown for Ohio
Carroll County, Ohio is starting to feel the negative effects of Chesapeake Energy’s troubles, as noted in a story yesterday in the Cleveland Plain Dealer. Because of recent revelations of debt financing, private hedge funds and other practices by Chesapeake CEO Aubrey McClendon, and a resulting fall in Chesapeake’s stock price and credit rating, drilling industry activity in Carroll County has slowed down—a lot.
At the county courthouse on the village square in Carrollton, workers are accustomed to the visitors from out of town, the folks eager for a stake in a promising shale gas industry.
For months, the people who equip drill sites, lease land and truck pipe and sand have besieged county offices with requests for records and guidance as they set up local operations.
Suddenly, the courthouse halls are noticeably quieter. Glenn Enslen, Carroll County’s director of economic development, thinks he knows why. Prospectors are waiting to see whether Chesapeake Energy, lord of the local gas fields, survives a financial crisis now playing out daily in the nation’s financial press.
"People are saying, ‘Let’s sit back and see what happens here,’ " Enslen said. "It’s still busy. But now we’ve got a little bit of a wait and see."
If Carroll County’s energy boom cools, so will Ohio’s.*
Roughly a third of the 221 horizontal well permits issued in Ohio are in Carroll County, and Chesapeake owns most of them, along with four active drilling rigs working in the county. But companies that service drilling are disappearing.
…the outfitters and subcontractors who once rushed toward Carroll County’s gas fields have grown scarce.
"Let’s put it this way, my phone stopped ringing," Enslen said.
He expects the calls to resume, but not until it becomes clearer that the company with the biggest stake in Ohio’s Utica shale can afford to play the game.*
*Cleveland (OH) The Plain Dealer (May 16, 2012) – A pause in Ohio’s gas boom as Chesapeake Energy struggles