Chesapeake Energy Hires Evercore to Auction Off Eagle Ford Assets
In April 2021, MDN brought you the news that Chesapeake Energy, after buying Eagle Ford oil assets in 2018 for $4 billion (during the reign of Doug Lawler), was looking to unload those assets for around $2 billion (see 50% Off Deal! Chesapeake Rumored to Shop Eagle Ford for $2B). The effort to dump the Eagle Ford assets is picking up, although Chessy’s new CEO says there “won’t be a fire sale” of the assets–meaning they want a lot more than $2 billion.
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Pennsylvania issued seven new shale permits for the week of August 8-14, with two each going to EQT (in Greene County) and Chesapeake Energy (in Sullivan County). Ohio issued five new permits, with four of them going to Encino Energy (Harrison County). Finally, West Virginia issue five new permits with all of them going to Jay-Bee Oil & Gas (Tyler County).
Chesapeake Energy issued its 2Q22 update on Tuesday and held a conference call with analysts yesterday. The big news is that Chesapeake has come full circle, back to its natural gas roots. Chessy CEO Nick Dell’Osso said the company will focus more on drilling for natural gas in both the Marcellus and Haynesville shale plays, and less on drilling in the company’s oil-focused Eagle Ford play. In fact, Chesapeake now views the Eagle Ford as “non-core” and will (soon) stop investing in drilling new wells there. Our take is that you can look for a sale of the EF assets soon.
Wow! What a difference two years can make. At the dawn of the pandemic, the share price for publicly traded oil and gas stocks (in particular Marcellus/Utica drillers) was in the basement. With the pandemic now in the rearview mirror (we hope), and demand increasing for both oil and natural gas, the price of oil and gas has skyrocketed, and along with it, O&G companies are raking in the cash. How are M-U drillers using their newfound piles of cash to compensate investors?
Wrapping up the coverage of the recent Hart Energy DUG East Conference, Pittsburgh Business Times reporter Paul Gough pulled together comments by various speakers on the topic of LNG and whether or not the Marcellus/Utica can and will benefit from a growth in American LNG exports. Opinions by some of the biggest drillers in the M-U diverged on this topic.
Among the speakers who addressed the conference delegates at Hart Energy’s DUG East conference on Tuesday was Chesapeake Energy COO Josh Viets. He traced the roots of the current energy crisis back to decisions and events some 20 years ago. Viets said, “Access to energy correlates to quality of life, and the industry has a responsibility to work to provide energy that is affordable, reliable and low-carbon.” Europe, said Viet, dropped the ball beginning 20 years ago by buying into the hype about so-called renewable energy and forsaking fossil fuel development, while the U.S. invested in fracking and fossil fuels, leading to our energy independence under Donald J. Trump.
Broadcasting its intent to expand aggressively in the LNG export market, Chesapeake Energy is advertising to hire a liquefied natural gas (LNG) advisor. The LinkedIn ad shows that so far 41 people have applied. The ad opens by saying the company is looking for “a lead for new business opportunities for Chesapeake for liquified natural gas (LNG) and provides guidance on LNG Marketing activities in order to optimize the company’s revenue.” And hey, good news: The job can be 100% remote!
It appears the wind has gone right out of the sails when it comes to issuing new permits for shale drilling in the Marcellus/Utica. For the week of May 23-29, only six new permits were issued. Four of the permits were issued in Pennsylvania, two in West Virginia, and none in Ohio. This is the lowest number in a single week we’ve seen in maybe forever. A measly, lousy six permits!