Chesapeake’s Reverse Stock Split Bombs, Company “On Life Support”
Chesapeake Energy pulled the trigger on a reverse stock split after the close of trading on Tuesday, combining 200 shares into one single new share (see Chesapeake Energy Reverse Stock Split 1-for-200). The old price per share closed on Tuesday at a paltry 13 cents/share. After the reverse split was done, the new share price became $26.64/share. Keep that in mind: The old price of $0.13/share with 200X more shares is equal to the new price of $26.64/share with 200X fewer shares. The company’s overall capitalization (its value or worth) is the same in both cases. So what happened to the share price yesterday, the first full day of trading at the new price?
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As cases of COVID-19 coronavirus began to climb in relatively rural Beaver County, PA, local politicians pressured Shell to stop work on the mighty ethane cracker plant facility they are building in Monaca. Shell quickly complied, sending nearly 8,000 workers home in mid-March for what was thought to be “a few days to a few weeks” (see 
Officials from both Delaware County and Chester County (suburbs of Philadelphia) sent a letter to state officials earlier this week asking the state to once again shut down critical work being done on the Mariner East 2 pipeline project. The county officials, at the prompting (control?) of the uber-leftist and radical Clean Air Council, are using the COVID-19 crisis as their excuse to try and shut down work on the project. In their letter, county officials cite unnamed and anecdotal “sources” who claim (lie?) that workers on the pipeline are violating social-distancing rules–at work and off. Ninny nannies tattling. Do you think workers would jeopardize their own health and the health of their families? No, we don’t think so either.
We see a very positive sign that the U.S. Supreme Court is potentially interested in accepting and ruling on a case of tremendous importance to the oil and gas industry. The case is PennEast Pipeline v State of New Jersey. NJ is attempting to block the PennEast project by denying it access to run across tracts of land either owned or controlled by the state, claiming federal eminent domain authority does not apply to state-owned land. NJ won the case in lower courts and PennEast appealed it all the way to the Supremes, who have now taken an active interest. No, they haven’t officially accepted the case…yet. But they have just signaled a strong interest.
Back in December MDN told you that Thailand’s Banpu, which has invested $500 million so far in the Pennsylvania Marcellus, had developed a wandering eye and cut a deal to buy Devon Energy’s Barnett Shale assets in Texas for $770 million (see 
Economists at consulting powerhouse The Brattle Group have released an assessment/report on the impacts through early April 2020 of COVID-19 on the electric and natural gas industries. The report (full copy below) summarizes recent developments in energy commodity spot and forward pricing, electricity demand, and financial markets, and speculates on what will happen if the pandemic persists. One of the surprising findings (for us) is that weather is having far more effect on keeping natgas prices low than COVID-19. There’s plenty of charts and analysis–really good stuff to ponder. Battle Group has a lot of smart people thinking about this stuff.
“Keep it in the Ground” (KIITG) has been the rallying cry of idiotic, low-brain function environmentalists for the past 3-4 years. They want “fossil fuels” to be kept in the ground, never to be developed. President Trump is mulling over a plan to KIITG–but not in the same way. Advisers to the President are proposing that the federal government pay for oil from American producers now, at historically low prices, but that the producers don’t deliver the oil right now. In fact, don’t drill at all–just keep it in the ground, out of the world market, in an attempt to lower world oil supplies and prop up the price.
MARCELLUS/UTICA REGION: Natural gas and oil industry steps up to help communities; Safety equipment relies on natural gas; New model could improve natural gas demand predictions in New York, other states; OTHER U.S. REGIONS: A big Texas shale explorer warns it’ll stop drilling if state imposes production caps; NATIONAL: Will Trump really slap tariffs on Saudi oil?; Natural gas price forecast – natural gas markets test lows; Democrats call for new gas pipeline moratorium amid pandemic; Bernie Sanders’ green energy poverty; Despite historic production cuts, oil is dying; 3 reasons why oil prices can hit $5.00; INTERNATIONAL: Underwhelming oil cut will weaken OPEC credibility.