Chesapeake Energy

American Energy Partners | Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation

McClendon Hires Top PR Firm to Respond to “Stolen Data” Charge
February 24, 2015February 24, 2015

Last week we told you about the silly lawsuit filed by Chesapeake Energy against its former co-founder and CEO Aubrey McClendon (see Chesapeake Energy Sues McClendon for Taking His Rolodex with Him). Chesapeake says McClendon took a bunch of data with him when he left and (gasp) used it to aggressively lease property in the Ohio Utica Shale. That is, they’re ticked that Aubrey continues to outclass them in every conceivable way. Did they think he’d just shrivel up and die after they tossed him out the door? Get real! Aubrey isn’t taking it lying down. This is a public relations battle as much as a court battle and in addition to having ace attorneys, Aubrey has hired one of the top PR firms in the country–Edleman–to respond to the Chesapeake lawsuit…
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Access Midstream Partners | Bradford County | Chesapeake Energy | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Williams

PA Landowners File RICO Royalty Lawsuit Against Chesapeake/Williams
February 19, 2015February 19, 2015

Along with acquiring Access Midstream (formerly Chesapeake Midstream), Williams has just acquired a brand new lawsuit. Two Bradford County, PA law firms along with a New Jersey law firm on Tuesday filed a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit on behalf of 90 landowners in Bradford County against Chesapeake Energy and Williams Partners (because Williams is now the owner of what was Access Midstream) claiming Chessy and Williams/Access conspired to defraud landowners of royalty money by deducting post-production expenses they had no right to deduct…
Read More “PA Landowners File RICO Royalty Lawsuit Against Chesapeake/Williams”
American Energy Partners | Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation

Chesapeake Energy Sues McClendon for Taking His Rolodex with Him
February 19, 2015February 19, 2015

This is rich. Yesterday Chesapeake Energy sued its former co-founder, Aubrey McClendon, claiming he took his rolodex (“contacts list” for our younger readers) with him when he left the building. Chesapeake said the data McClendon took with him had “trade secrets” in it. McClendon, in responding to the frivolous lawsuit, said that the data he took was part of his contractual agreement with Chesapeake. McClendon was and remains Chessy’s biggest partner, with a working interest in almost all of the wells they’ve drilled. Apparently his ongoing relationship with the company he co-founded bothers the Powers That Be (corporate raiders Carl Icahn and Mason Hawkins)…
Read More “Chesapeake Energy Sues McClendon for Taking His Rolodex with Him”
Chesapeake Energy | Energy Companies | Industrywide Issues | Regulation | Southwestern Energy | Statewide WV | West Virginia

WV Legislature Passes Bill to Help Southwestern Keep Drilling
January 29, 2015January 29, 2015

Currently in West Virginia, if an E&P company, say Chesapeake Energy, has applied for and received permits to drill dozens or hundreds of wells which are currently in various states of being drilled, and then decides to sell those leases and drilling operations to someone else, like Southwestern Energy, the drilling law passed a few years ago says the new company buying those leases and drilling operations must re-apply for all of those permits to continue drilling. That’s a big problem. Southwestern, you may recall, has just paid Chessy $5.375 BILLION for leases, wells and drilling operations–most of it in WV. Can you imagine what will happen? Rigs idled…people laid off…chaos and confusion. It’s an economic disaster. So you can understand why the WV legislature has dispensed with the rules and passed a bill in record time that fixes the problem, allowing Southwestern (or anyone else) to assume permits on leased property that changes hands…
Read More “WV Legislature Passes Bill to Help Southwestern Keep Drilling”
Chesapeake Energy | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Guest Post: Bradford Co Landowner Asks Gov. Wolf to Support HB 1684
January 27, 2015January 27, 2015

MDN has written plenty about Pennsylvania’s HB 1684–the Guaranteed Minimum Royalty Act (see these MDN articles). In essence, some companies (cough *Chesapeake Energy* cough) have gotten creative with deducting post-production costs from royalty checks. According to the PA Guaranteed Minimum Royalty Act of 1979, royalty owners (landowners) must receive no less than 1/8, or 12.5%, by law. But when Chessy and others start deducting this and that, never spelled out in the original lease agreement, landowners are getting the shaft–way lower than 12.5%. In some cases they get royalty checks for a few dollars! Bradford County landowner John Williams is concerned, both about HB 1684 and newly elected Gov. Tom Wolf’s stand on that bill, and about Wolf’s proposed 5% severance tax. Will the severance tax be the next deduction gas companies take, further reducing royalty checks? Is the severance tax Tom Wolf proposes a tax that will be paid, in essence, by landowners? We thank John for his guest post…
Read More “Guest Post: Bradford Co Landowner Asks Gov. Wolf to Support HB 1684”
Chesapeake Energy | Energy Companies | Industrywide Issues | M&A

Rumor Mill: Indian Oil Co Wants to Buy Chesapeake Energy
January 21, 2015January 21, 2015

Carl Ichan, corporate raider and puppet master at Chesapeake Energy, must be rubbing his hands together in glee. The rumor mill is buzzing that Oil & Natural Gas Corporation Limited (ONGC), the state-run national oil company of India, is “aggressively” pursuing Chesapeake–to buy it. It appears ONGC wants to buy the whole company, although we don’t know that for sure. The ONGC/Chessy buzz has Chessy’s stock trading higher, which delights Mr. Ichan. Here’s what we’re able to find about this latest rumor…
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Chesapeake Energy | Energy Companies | Ohio | Statewide OH | Total | Utica Shale

Total Scales Back Investment in Utica Shale, Blames Low Oil Price
January 21, 2015January 21, 2015

Total (pronounced “toe-tail”), is a French multinational integrated oil and gas company and one of the six “supermajor” oil companies in the world. Yesterday the relatively new CEO of Total, Patrick Pouyanne, announced that he’s scaling back in the North Sea fields and in U.S. shale plays. In 2012, Total plowed more than $2 billion into the Utica Shale, partnering with Chesapeake Energy (see Chesapeake Sells More of its Utica Leases to Total). In September 2014, Total sold off a smallish investment they had in Cardinal Midstream, a Utica midstream company, to South Korean investors for $400 million (see Total, EVEP Sell Interest in Cardinal Midstream to S Koreans for $612M). Patrick Pouyanne became CEO of Total last October after a freak runway accident killed Total’s colorful and long-time CEO Christophe de Margerie (see French Supermajor Total CEO Killed in Freak Runway Accident). Pouyanne is now making his mark on the company. He blames the plunge in oil prices for his action. Here’s what Pouyanne said at a conference in Davos, Switzerland earlier this morning…
Read More “Total Scales Back Investment in Utica Shale, Blames Low Oil Price”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Chesapeake & PA Landowners Settle Royalty Lawsuit…Again
December 30, 2014December 30, 2014

In September 2013 MDN told you that Chesapeake Energy had “settled” a lawsuit that would reimburse Pennsylvania landowners for post-production costs Chesapeake had deducted from royalty checks, leaving some landowners with checks for pennies (see Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M). As we said at the time, it was a pittance that Chessy would pay $7.5 million to be shared among “several thousand” landowners, with 1/3 of it going to lawyers. The suit was never settled because some landowners sued to block it while they filed their own, separate lawsuit. The disagreeing landowners have finally joined and have (now) accepted an offer from Chesapeake to settle–for $11 million. Still peanuts if you ask us, but perhaps something is better than nothing?…
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Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Southwestern Energy | Statewide WV | West Virginia

Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre
December 29, 2014December 29, 2014

Last week MDN told you that Chesapeake Energy closed on a deal to sell some 413,000 Marcellus Shale acres, mostly in West Virginia (some in Pennsylvania) to Southwestern Energy (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). The deal ended up being worth $4.975 billion, discounted from the original $5.375 billion because Southwestern agreed not to sue Chessy for “title defects” when and should that occur. As we said at the time, we’re not sure if a $400 million discount is a good deal or not in the case some of the titles to leases aren’t free and clear. But the bigger story, in our humble opinion, is this: Chesapeake picked up some of those leases that originally paid landowners as little as $5 per acre and as much as $5,000 per acre. They just turned around and sold those same leases for $12,000 an acre. That made corporate raider Carl Icahn, Geppetto pulling the strings at Chesapeake, really really happy…
Read More “Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre”
Chesapeake Energy | Energy Companies | Equinor/Statoil | Pennsylvania | Southwestern Energy | Statewide PA | Statewide WV | West Virginia

Statoil Reduces Marcellus Holdings in $394M Deal with Southwestern
December 23, 2014December 23, 2014

Time to follow the bouncing ball–this is a tad complicated, but we’ll do our best to explain it. In 2008, Chesapeake Energy (under then-CEO Aubrey McClendon) took on a “silent” investing partner for 600,000 net acres in the Marcellus of West Virginia and southwest Pennsylvania. The non-operating partner for the acreage was Norwegian company Statoil, with a 32.5% interest in the acreage. Statoil put up buckets of money and Chessy did the drilling. Fast forward to October of this year. Chesapeake cut a deal to sell most of that acreage–some 413,000 acres with 435 drilled wells (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). The buyer is Southwestern Energy. In order for the deal to close, Statoil has to sign on. Today, Statoil announced they have cut a deal with Southwestern to reduce Statoil’s now 29% interest in the acreage down to a 23% interest, in return for a $394 million check from Southwestern…
Read More “Statoil Reduces Marcellus Holdings in $394M Deal with Southwestern”
Chesapeake Energy | Energy Companies | Southwestern Energy

Chesapeake Using $1B from Southwestern Deal to Buy Back Stock
December 23, 2014December 23, 2014

A press release issued yesterday by Chesapeake Energy caught our interest. Chessy announced the closing of the deal we first announced back in October–a deal to sell some 413,000 Marcellus/Utica acres plus 435 already-drilled wells on that acreage to Southwestern Energy for $5.375 billion (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Yesterday’s announcement says the deal is now done (see our related story today about Southwestern and Statoil), and that Chessy will use some of that money to buy back $1 billion worth of common stock, an effort to boost the company’s stock price. What’s interesting to us, aside from trying to make Carl Icahn’s stocks worth more, is how the details of the deal with Southwestern changed from October to now…
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Chesapeake Energy | Energy Companies

Chesapeake Gets $4B Line of Credit Refinanced Extra 5 Yrs
December 17, 2014December 17, 2014

With numbers that are really too large to get your head around, Chesapeake Energy announced yesterday that their creditors have agreed to give them another five years to pay back $4 billion–and the deal will allow them to borrow up to another $1 billion along the way! To be fair, it is an “unsecured revolving credit facility.” That is, a line a credit. Write a check and if you haven’t borrowed up to the maximum, the check will clear. The announcement does not say how much of that $4 billion, originally due in December 2015, has been used and how much is left to be used. Here’s what Chessy did say yesterday:
Read More “Chesapeake Gets $4B Line of Credit Refinanced Extra 5 Yrs”
Anadarko | Chesapeake Energy | Citrus | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Regulation | Statewide PA | Statewide WV | West Virginia

DOL Action: Several Marcellus Drillers Pay $4.5M in Back Wages
December 10, 2014December 10, 2014

In a multi-year so-called “investigation” that cost more money that was “recovered,” the U.S. Dept. of Labor (DOL) announced yesterday they’ve forced Chesapeake Energy, Citrus Energy and Anadarko Petroleum (and perhaps others) to pay $4.5 million in back wages to some 5,300 oil and gas workers in Pennsylvania and West Virginia. The apparent “violation” is that these workers, working for subcontractors (not directly for the energy companies themselves), in some cases worked more than 40 hours in a given week but didn’t get time-and-a-half wages. We’re certainly not against playing by the rules, but it sure seems like utter folly to hype this as some sort of victory by Obama’s Labor Department–to work for more than two years and come up with a thimble-full of violations and carp and complain about how fractured the energy industry is–the same industry that, because of all those many subcontractors, has generated several hundred thousands new jobs in PA & WV that wouldn’t have been there otherwise. Here’s the press release by the DOL…
Read More “DOL Action: Several Marcellus Drillers Pay $4.5M in Back Wages”
Chesapeake Energy | Energy Companies

Chesapeake Energy 3Q14: Utica Production Up 27%, Marcellus Up 1%
November 6, 2014November 6, 2014

The mighty Chesapeake Energy, increasingly a shell of its former self, issued their third quarter 2014 update yesterday. In the update we find that production for Chesapeake in the Utica Shale shot up 27% over the previous year. However, Marcellus production was up just 1%. The cost to complete a well in both the Utica and Marcellus went down year over year. Very interesting (to us) is that although Utica wells are much deeper, they cost Chessy less to drill. They spend $6.5 million on average to drill and complete a Utica Shale well vs. $7 million for their average Marcellus Shale well…
Read More “Chesapeake Energy 3Q14: Utica Production Up 27%, Marcellus Up 1%”
Chesapeake Energy | Energy Companies | Southwestern Energy

Fitch Ratings Says Chesapeake/Southwestern Megadeal a “Win/Win”
October 20, 2014October 20, 2014

There are three ratings agencies (the “big three”) that rate companies and governments on their financial health, including the ability to borrow money and pay it back. The big three are Standard & Poor’s, Moody’s and Fitch Ratings. Fitch, in a move we have not seen before, issued a press release on Friday commenting on last Thursday’s really big news that Chesapeake is selling 413,000 acres and 435 drilled wells–all of it in the Marcellus/Utica–to Southwestern Energy (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Fitch jumped in with their own analysis of the deal and has pronounced it a “win/win”…
Read More “Fitch Ratings Says Chesapeake/Southwestern Megadeal a “Win/Win””
Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania | Southwestern Energy | Statewide WV | Washington County | West Virginia

Chesapeake Sells Close to 25% of Marcellus/Utica Operation
October 16, 2014October 16, 2014

The Chesapeake Energy fire sale continues–and this time it’s cut right into the bone and sinew of the company. The beneficiary of Chesapeake’s ongoing divestiture, this time, is Southwestern Energy. Southwestern has signed a deal to pick up 413,000 (!) Marcellus/Utica acres, most of it in West Virginia with some of it in Washington County, PA. Much of the land is in prime wet gas areas (see the map below). The deal includes 256 (!) operating and producing Marcellus and Utica Shale wells and another 179 (!) non-operated, non-producing wells–a total of 435 drilled wells. Southwestern is paying Chesapeake $5.375 BILLION for the deal–which will make Chesapeake’s real boss, corporate raider Carl Icahn, very happy…
Read More “Chesapeake Sells Close to 25% of Marcellus/Utica Operation”