Everybody Just Subpoenaed Chesapeake Energy for Everything
Since before Aubrey McClendon left the helm at Chesapeake Energy, the company has been controversial and to one degree or another, in hot water. Legally. You’ve read plenty on MDN about who’s sued Chessy, over royalties, over collusion on land deals, over nonpayments to suppliers. You’ve also read about various investigations by various government entities into Chesapeake and their practices. It appears like it’s all reaching a fevered pitch. Yesterday Chesapeake filed disclosure forms with the Securities and Exchange Commission which says the U.S. Dept. of Justice, a number of states, and even the U.S. Postal Service have served the company with subpoenas for information. In essence, everyone has subpoenaed Chesapeake for everything…
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Last week MDN told you that evil corporate raider Carl Icahn has thrown in the towel with respect to ever making money from Chesapeake Energy. He recently sold off half his Chessy stock (see 
Last Friday MDN ran a guest post from an executive who works for a Pennsylvania exploration and production company (E&P, what we call a “driller” here on MDN). In the post, titled 
Canadian driller and midstream company Epsilon Energy had a shareholder rebellion in 2013 and threw out the sitting board of directors (see 
“Pay no attention to that corporate raider behind the curtain! I am the great and powerful Oz!!” Carl Icahn is an evil corporate raider who buys just enough stock in a company to fire a bunch of people and force the company to sell key assets–all so the stock price will pop up and he can then sell his shares at a tidy profit. Icahn has been doing it for years. He tried it with Chesapeake, firing co-founder Aubrey McClendon back in 2013 (see 
Yesterday MDN reported that Wilmot Township, located in one of the most-drilled counties in Pennsylvania (Bradford County) has taken the unusual step of demanding that drillers (in particular Chesapeake Energy) stop flowing natural gas from drilled wells unless/until they start paying landowners a minimum 12.5% royalty for the gas produced (see 
Residents in Wilmot Township (Bradford County), PA are mad as hell over shorted royalty checks–and they aren’t taking it anymore. Yesterday Wilmot Township’s three supervisors passed a resolution demanding, “production be discontinued from wells where landowners are having their royalty checks diminished to nothing or nearly nothing.” That is, they want to block natural gas production from existing shale wells drilled in a town smack in the middle of one of the most-drilled places in Pennsylvania. We’ve long chronicled the fight between landowners and some (certainly not all) drillers who are screwing them out of royalty payments by claiming inflated post-production costs. The issue first came to prominence with claims by landowners signed with Chesapeake Energy, who claimed Chessy had cut a sweetheart deal with its former midstream company (Access Midstream) whereby Access bumped up its charges for piping gas which Chesapeake claimed as an expense and deducted from royalty checks, and then Access turned around and invested big money into the old mothership company (see 
Everyone loves a Top 5 or Top 10, including MDN. Who are the Top 5 drillers in the Utica Shale? It depends, of course, on your criteria for selecting such a list. One of MDN’s favorite writers on The Motley Fool website, Matt DiLallo, has just published what he calls “The 5 Companies Dominating the Utica Shale Play.” In other words, the Top 5 Utica drillers. Matt points out that in the span of five short years the Utica has become the nation’s second largest shale gas play, behind only the Marcellus. Matt uses a combination of acres-under-lease and number-of-wells-drilled to come up with his list of five drillers who are leading the charge in the Utica. It won’t surprise you to learn that Chesapeake Energy, which was the first company to drill in the Utica under then-CEO Aubrey McClendon, is head-and-shoulders above the rest as the #1 Dominator in the Utica. Some of the others in the Top 5 list may, however, surprise you. Here’s Matt’s excellent roundup of the Utica…
Last December Pennsylvania’s felony-indicted Attorney General, Kathleen Kane, brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
Yesterday Chesapeake Energy, the secon largest natural gas producer in the United States (and the largest Marcellus producer, by far) issued three press releases. The first release said the company is working to obtain a five-year bank loan for a staggering $1 billion. The second two releases outlined what they will do with that money: pay off older IOUs. We also spotted commentary on the company’s $1B plan. One analyst predicts Chesapeake is heading for a pre-packaged bankruptcy, similar to what other o&g companies have done, and this massive loan/debt repayment is proof. Another analyst says Chessy CEO Doug Lawler is brilliant and that this move will strengthen Chessy’s stock in the long-term and make the company more solvent. Which one is right? They both can’t be right…
We sometimes run Top 10 lists for the Marcellus/Utica, or even the U.S., but what about a Top 10 list of natural gas producers in the entire world? We spotted an article on the Forbes magazine website that lists the Top 10 natgas producers for the entire world. By our count, eight of the ten have major or minor operations in the Marcellus/Utica. Cool! Here’s the list…
Chesapeake Energy had some big news on Tuesday. The company is selling off its Barnett Shale assets, and in the process lightening the company’s future debt load considerably. This is a bit complicated, but we’ll try our best to break it down. Chesapeake announced Tuesday they are handing over the keys to 215,000 Barnett Shale acres (some developed, some not), along with 2,800 operational wells–giving it away to Saddle Barnett Resources LLC, a Dallas-based firm backed by First Reserve Corp. In return, Saddle Barnett is taking on renegotiated midstream contracts with Williams. The net result for Chesapeake is that the deal will “incinerate” about $1.9 billion in payments they would have had to make to Williams and others. As we said, it considerably lightens the stress on Chesapeake’s balance sheet. Williams is trying to put a happy face on the fact they will get less money after the deal than before. But then again, a solvent Chesapeake (and/or Saddle Barnett) paying something less is better than a bankrupt Chesapeake paying nothing. Why cover this story on MDN, a Marcellus/Utica focused website? Because if Chesapeake did it in the Barnett in Texas, they (or someone else) may try to do something similar in the Marcellus/Utica…
A landowner couple in Bradford County, PA, Edward and Kathleen Ostroski, filed a royalty lawsuit against Chesapeake Energy claiming Chesapeake was screwing them out of money by conducting “creative” accounting and deducting expenses that shouldn’t be deducted. Seems like there’s hardly a state where Chessy drills where someone has not filed a similar lawsuit against the company. However, in the Ostroski case, the couple claimed (or rather, their lawyers claimed) the case should be a class action. That there are in fact some 2,000 other landowners similarly affected by Chesapeake’s actions. A U.S. Middle District judge ruled on Monday that the Ostroskis may pursue their case–but only for themselves. There will be no class action. If other landowners feel cheated, they will have to bring their own lawsuits against the company…