Chesapeake Energy

Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation | Michigan | Statewide MI

Michigan Succeeds in Shaking Down Chesapeake for Measly $25M
April 28, 2015April 28, 2015

The shakedown is complete. In June 2012 Reuters tried to stir up trouble against Chesapeake Energy by broadcasting “leaked” (Watergate anyone?) emails that somehow magically appeared on the Reuters doorstep that supposedly show Chesapeake trying to collude with Encana Energy to keep the price of Michigan state land oil and gas leases artificially low (see Did Reuters Break the Law with Latest Chesapeake Story?). Eventually Michigan Attorney General Bill Schuette filed charges against Chesapeake, even though the federal government investigated and didn’t find anything worth pursuing. Schuette put his reputation on the line and was hell-bent to ensure he got something/anything out of Chesapeake. Schuette finally has a settlement–for a measly $25 million. It likely cost his department more than that to pursue Chesapeake. But, Schuette’s shakedown for $25M lets him save face, and it lets Chesapeake move on from this sham charge in Michigan…
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American Energy Partners | Chesapeake Energy | EMG | Energy Companies | Energy Services | Harrison County | Industrywide Issues | Litigation | Ohio

EMG Stabs McClendon in the Back re Chesapeake Data Lawsuit
April 15, 2015April 15, 2015

This is a strange and complicated tale that boils down to this: Aubrey McClendon has a singular talent for finding and taking money from people who later turn around and stick a knife in his back. You may remember in February the story we brought you that Chesapeake Energy had sued its former co-founder, Aubrey McClendon, claiming he stole data on his way out the door (see Chesapeake Energy Sues McClendon for Taking His Rolodex with Him). McClendon responded that he contractually had every right to take the data he took with him (see McClendon Hires Top PR Firm to Respond to “Stolen Data” Charge). This is where it gets complicated. Aubrey has spun off several companies from his new company American Energy Partners (AEP). For example, one of the companies (named in the Chesapeake lawsuit) is American Energy-Utica, LLC, (AEU), operating in Ohio’s Utica Shale region. A major funding partner for AEU is Energy & Minerals Group (EMG). EMG is, essentially, in charge of AEU. EMG has just cut a deal with Chesapeake, behind Aubrey’s back, to give Chesapeake 6,000 acres of leases in northern Harrison County along with $25 million in extortion, er ah hush money, er ah “damages” thereby removing EMG/AEU from the Chesapeake lawsuit. The lawsuit against Aubrey and mother company AEP will continue–but the child company/EMG investors won’t be part of it. Aubrey is hopping mad because EMG didn’t tell him nor seek his blessing on their deal with Chesapeake…
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Chesapeake Energy | Coterra Energy (Cabot O&G) | Energy Companies | EQT Corp | Pennsylvania | Range Resources Corp | Southwestern Energy | Statewide PA

Envelope Please: Top 5 PA Marcellus Shale Gas Producers for 2014
April 7, 2015April 7, 2015

Who were the top 5 natural gas producers in Pennsylvania for all of 2014? The names of the companies won’t surprise you if you’ve read MDN for any length of time. But the order of the list may surprise you, and the number of active wells for some of them likely will surprise you…
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Chesapeake Energy | Energy Companies

Chesapeake’s Chairman Buys 1 Million Shares – What Does it Mean?
April 6, 2015April 5, 2015

Back in 2012 as the palace coup was getting under way at Chesapeake Energy, five new board members were installed by corporate raiders Carl Ichan and Mason Hawkins (the two biggest stockholders in the company). At that time, Ichan and Hawkins selected Archie Dunham, then 73 years old, as the new chairman of the board (see Chesapeake Energy’s Board Changes, Archie Dunham New Chairman). Dunham is the retired chairman of ConocoPhillips. He was previously chairman, president and chief executive officer of Conoco Inc. from 1999-2002, after being elected president and CEO in 1996. To his credit, Dunham has stuck around at Chessy. He’s obviously drinking the Doug Lawler (current CEO of Chesapeake) Kool Aid and believes mass firings and selling everything but the kitchen sink will turn the company into a money maker. He believes so much he just spent $13,980,000 of his own money to buy 1 million shares of stock, upping his stake in the company to 2.6 million shares. Dunham thinks the stock is at its rock bottom right now and has no place else to go but up. Is Dunham crazy like a fox? Or is he just plain crazy?…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Statewide PA

Judge Rules Royalty Lawsuit Against Chesapeake in PA Continues
April 2, 2015April 2, 2015

Last June MDN told you about a class action lawsuit filed by the Suessenbach Family Limited Partnership. Using a Wilkes-Barre, PA law firm, Suessenbach launched a “sprawling class action” lawsuit against Chesapeake Energy and Access Midstream accusing the two companies of a $5 billion scheme to defraud landowners out of royalties rightfully due to them (see 2nd PA Class Action Lawsuit Against Chesapeake re Royalty Fraud). MDN previously covered how the Chesapeake/Access scheme worked (see Chesapeake Shafting Landowners out of Royalties Mess Gets Messier). In December, another class action lawsuit was settled (see Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners). However, Suessenbach soldiered on with their lawsuit. Chesapeake tried to have the Suessenbach lawsuit tossed, but a federal judge earlier this week denied that motion and has ruled there’s enough of a case for Suessenbach to continue…
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Chesapeake Energy | Energy Companies

Chesapeake Slashes 2015 Budget Again, Another $500M
March 24, 2015March 24, 2015

Just a month ago Chesapeake Energy released their disastrous 2014 numbers and their stock price took a huge hit. Along with the numbers for 2014, Chessy released a projected budget for 2015 of $4-$4.5 billion, down 34% over 2014 (see Chesapeake Energy Earnings Down 60%; Cutting Budget 34% in 2015). It’s a month later and Chesapeake has just slashed the 2015 budget again–another $500 million. They blame it on the low commodity price of natural gas…
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Chesapeake Energy | Energy Companies

Carl Ichan Ups Ownership of Chesapeake, Continues to Lose $
March 24, 2015March 24, 2015

Corporate Raider Carl Ichan continues his stranglehold on Chesapeake Energy. Ichan, you may recall, holds the second highest number of Chesapeake shares of stock and was largely the person responsible for booting Aubrey McClendon from the company he co-founded in April 2013 (see McClendon Exits Chesapeake, Well-Bonused “Friends” Replace Him). In the lead-up to ejecting McClendon, Ichan increased his ownership in the company, starting in November 2012 (see Carl Ichan Ups Stake in Chesapeake Energy). He upped his ownership again after McClendon left, in August 2013 (see Corporate Raider Carl Ichan Ups Stake in Chesapeake – Again). How has that worked out for Carl? He’s losing money hand over fist (see Carl Icahn Has Lost $633 Million on Chesapeake Gamble…So Far). But channeling his inner Britney Spears (“Oops I Did It Again”), Carl just can’t get enough of the money-losing Chessy. He’s just increased his stake again–to 11% of the company. He remains Chessy’s #2 stockholder, behind fellow corporate raider Mason Hawkins…
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Chesapeake Energy | Energy Companies | Ohio | Statewide OH | Utica Shale

Chesapeake: Next Few Years Will Separate Weak & Strong in Utica
March 18, 2015March 18, 2015

Chris Doyle is executive vice president of operations for Chesapeake Energy’s northern division. He previously held a similar position with Anadarko Petroleum. Doyle recently spoke to Columbus Business First about Chessy’s prospects, indeed everyone’s prospects, in the Ohio Utica Shale. Sounding rather Darwinian, Doyle said we’re now entering a phase in the Utica where the strong will survive, and the weak won’t. Obviously he believes Chesapeake is in the “strong” category…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Kathleen “Wag the Dog” Kane Says Chessy Investigation Almost Done
March 18, 2015March 18, 2015

One of the Democrats’ favorite tactics: When the spotlight is on you because of your own criminal behavior, try to turn it elsewhere. Quick, anywhere! Bill Clinton tried it when he was being dogged by the Monica Lewinsky scandal–he bombed an aspirin factory in the Sudan. It’s called Wag the Dog–as in create a new issue to distract people from the old issue you don’t want them to focus on any more. Apparently Pennsylvania’s Attorney General, Kathleen Kane, is using the same tactic. A grand jury says Kane broke the law herself in her role as AG by committing perjury (see PA Grand Jury Finds Anti-Drilling AG Kathleen Kane Lied Under Oath). Kane is fighting the charge in court by using Bill Clinton’s lawyer attack dog Lanny Davis. Apparently Lanny is now advising Kane to Wag that Dog too. So Kane is saying her investigation of Chesapeake Energy over shorting landowners out of royalties due to them is “almost wrapped up”–which of course has everyone buzzing and forgetting about her own criminal behavior…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners
March 16, 2015March 16, 2015

In December MDN told you about a settlement between “several thousand” Pennsylvania landowners and Chesapeake over the royalty issue–Chessy deducting post-production payments by pipeline companies in what some call a scam that leaves landowners signed with Chesapeake receiving royalty checks that are pennies on the dollar compared to what they should receive. The new settlement for those “several thousand” would be 2/3 of $11 million, after the lawyers get their 1/3 cut (see Chesapeake & PA Landowners Settle Royalty Lawsuit…Again). However, not all PA landowners leased with Chesapeake are happy about it. Two other, separate lawsuits against Chesapeake are proceeding and, according to attorneys, the settlement will not affect these separate lawsuits which are proceeding, unless the leases have a “market enhancement” clause…
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Chesapeake Energy | Energy Companies | Energy Services | GASFRAC | Hydraulic Fracturing | Industrywide Issues | Ohio | Tuscarawas County | Utica Shale

Chesapeake Tries Waterless Fracking at OH Utica Shale Well
March 12, 2015March 12, 2015

Something we consider pretty big news: Chesapeake Energy is running an experiment with waterless fracking. They’ve contracted with Canadian waterless fracking company GASFRAC to attempt what is the second (that we’re aware of) waterless frack job on a Utica Shale well–in Tuscarawas County, OH. The first waterless frack job done by GASFRAC was for EV Energy Partners on a Utica well also in Tuscarawas County (see Details on GASFRAC’s Waterless Frack Test in OH Utica). We consider it a good sign that Chessy thinks its worth a few million bucks to try it out for themselves. Chessy stresses this is still very preliminary…
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Chesapeake Energy | Columbiana County | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio

Columbiana Landowners Win Right to Renegotiate Some Lease Terms
March 11, 2015March 11, 2015

In 2008, before the word “Utica Shale” was on people’s lips and in their consciousness, landmen from Patriot Energy Partners “smiled and dialed” calling up landowners in Columbiana County, offering them a whopping $10 (yes 10 bucks) an acre to sign gas and oil exploration leases. Patriot mailed them the contracts, the landowners signed and sent them back, and then got pennies on the dollar for what those leases were actually worth. Patriot then flipped the leases, selling the deep exploration rights to Chesapeake Energy–for $1,100 an acre. Patriot claimed the practice (of hoodwinking landowners and flipping leases) is legal. The landowners wised up and in 2011, 25 landowner families sued to have their leases dissolved. Four years later the case, after going to arbitration, is resolved…
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Carroll County | Chesapeake Energy | Columbiana County | Energy Companies | Hilcorp Energy | Jefferson County (OH) | Mercer County | Ohio | Pennsylvania

More Permits Issued for Drilling in (Yes) Northern Utica in OH/PA
March 5, 2015March 5, 2015

More evidence that drilling in the northern Ohio and Pennsylvania Utica is most definitely NOT dead. Both Chesapeake Energy and Hillcorp recently received permits to drill in the northern Utica on both sides of the border…
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Chesapeake Energy | Energy Companies

Chesapeake Energy Earnings Down 60%; Cutting Budget 34% in 2015
February 26, 2015February 26, 2015

Corporate raiders Mason Hawkins and Carl Ichan, Chesapeake Energy’s two largest investors, are not happy men today. Chesapeake released its full year and fourth quarter 2014 update yesterday and earnings were down–60% from 2013. Depressed earnings can largely be blamed on the low price of natural gas and oil, but also on Chesapeake’s lower estimated production for 2015. The news resulted in a stampede of investors selling Chessy’s stock–which took a massive 11% hit yesterday. Among the many bits of news coming from Chesapeake yesterday is that the company will slash its 2015 capital budget 34% over what it spent in 2014. There will be less drilling in both the Marcellus and Utica Shale, and Chesapeake is actually (if you believe them this time) shutting in wells in the Marcellus/Utica and curtailing some of their production, waiting for the price to increase. They’ve made that threat in the past and never followed through (see Chesapeake’s NatGas Production Cuts Never Materialized). The boy who cried wolf comes to mind. Below is the 2014 report from Chesapeake…
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Chesapeake Energy | Energy Companies

Chesapeake Energy Investor Phone Call Excerpts + PowerPoint
February 26, 2015February 26, 2015

Yesterday’s news that Chesapeake Energy is scaling back both production and new drilling in the Marcellus/Utica largely came from an analyst call in which Chesapeake management provided answers to questions by analysts. Below we have select portions of the transcript from that phone call, along with a copy of Chesapeake’s latest company presentation (slide deck). Chesapeake’s management talks about curtailment (shutting in and slowing down production) in the Marcellus, and scaling back new drilling in the Utica…
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American Energy Partners | Chesapeake Energy | Energy Companies | Harrison County | Lease & Royalty Payments | Ohio | Utica Shale

Harrison County, OH Hauls in $1.6M in 2 Weeks from Utica Leases
February 24, 2015February 24, 2015

Even though the price of oil and natural gas is depressed, there are still lease deals happening–particularly in the Ohio Utica Shale region–that make your eyes pop out. Whoops! Just had to put an eyeball back in. It popped out at the latest lease numbers coming from Harrison County, OH where they’ve taken in $1.6 million over the past couple of weeks…
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