Chesapeake Energy Execs Paid $25 Million in Bonuses
Chesapeake Energy’s executives, including CEO Doug Lawler, have arguably made some bad decisions about the company–for years. The executives decided to convert Chessy from a gas-focused driller to an oil-focused driller, selling off its prized Utica Shale assets in Ohio to do so in 2018 (see Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B). It was the wrong decision. Now that the oil market is crashing and burning, the company (with $9 billion in debt) is preparing to file for bankruptcy (see Chesapeake Energy Prepares Potential Ch. 11 Bankruptcy Filing). So what does the board do? The board has just rewarded its top executives, including Lawler, with $25 million in “incentives” to stick around for another 12 months! That takes the cake.
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Last Friday Gulfport Energy, the third-largest (by number wells drilled) producer in the Ohio Utica Shale (210,000 acres) which concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays, issued its first-quarter 2020 update. On paper, the company lost $517 million due to a one-time impairment charge (writing down of asset value) of $553 million. The company said on Friday it would “shut in a minimal amount production” over the next few months given the virus pandemic.
Harvest Oil & Gas completed a reverse stock split on Friday combining 10 shares of stock for one new share. Harvest’s drilling and assets are focused in Ohio, Pennsylvania, West Virginia, where they own/operate 9,787 conventional wells. The company cut a deal in March to sell off all of its Michigan assets. Who is Harvest?
One week ago the Texas Eastern Pipeline Company (TETCO) pipeline running through Kentucky exploded for the second time in a year (see 
Montage Resources, the new name for the merger of Eclipse Resources with Blue Ridge Mountain Resources a year ago, issued its first-quarter 2020 update on Friday. Montage drills exclusively in the Marcellus/Utica region. The company continues to trim its 2020 drilling budget, now down another 10% from just several weeks ago, to $130-$150 million.
Here’s an interesting aspect of the natural gas business you may not have heard about before (we hadn’t). As you may know, not all gas produced gets used immediately. Some gas gets stored, typically in underground caverns, and later extracted for use when needed. Buyers (like utility companies) contract with storage fields to park the gas they’ve purchased until they need it. What you may not know is that not 100% of the molecules that go in come back out again.
MARCELLUS/UTICA REGION: PA DEP Air Quality Advisory Committee takes no position on proposed carbon tax; OTHER U.S. REGIONS: Schlumberger plans to cut jobs in Houston; NATIONAL: U.S. drilling rig count lowest since 1975 as shale boom fades; Midstream companies are making deep cuts to capital spending; We disagree with you, so shut up – environmental left cage fight; Now more than ever, Americans must support oil and natural gas; INTERNATIONAL: Qatar uses market mayhem to secure top spot in global LNG market.