Chesapeake Energy | Chief Oil & Gas | Energy Companies | Industrywide Issues | M&A | Pennsylvania | Statewide PA
Rees-Jones Says He ‘Saved the Best for Last’ with Chief O&G Sale
Last week MDN brought you the news that Chesapeake Energy is buying Marcellus driller Chief Oil & Gas (plus associated non-operated assets from Tug Hill Operating) for $2 billion in cash and approximately 9.44 million common shares (see Chesapeake Buys Chief Oil & Gas & Non-op Tug Hill Assets for $2.6B). Chief is privately owned by Dallas, Texas billionaire Trevor Rees-Jones. With the deal signed, he’s talking about how he “saved the best for last” with the sale of Chief…
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Yesterday CNX Resources issued its fourth quarter and full-year update for 2021. As it has done over the past few years, CNX did not issue a full update (no narrative), opting to let its official SEC filing do the talking for it. What does the quarterly update show? The company pumped 1.7 billion cubic feet per day (Bcf/d) of natural gas and equivalents during 4Q. CNX averaged 1.6 Bcf/d for the full year. The company swung from losing $873 million in 3Q to making a profit of $630 million in 4Q–a $1.5 billion swing! How many wells did CNX drill in 4Q?
Diversified Energy (formerly Diversified Gas & Oil), which owns close to 8 million acres of leases with some 67,000 (mostly) conventional oil and gas wells, made 2021 the year to expand–outside the M-U region. The company purchased major assets in the Cotton Valley/Haynesville region of Lousiana, the Barnett play in Texas, and most recently, in the Mid-Continent in Oklahoma. Diversified got its start by buying up old conventional O&G wells in Appalachia. But a funny thing happened on the way to the forum…Diversified has begun buying older shale wells too. The company is now the fifth-largest owner of shale wells in the southwestern PA Marcellus.
This is getting interesting. Last week MDN told you that Canadian driller Questerre Energy has found a way to fight back against Quebec, Canada’s insane, irrational plan to outlaw all oil and gas drilling–including drilling in the province’s Utica Shale layer–by forming an alliance with a local Indian tribe to drill on Indian land (see 
As predicted last week by Reuters, Chesapeake Energy announced yesterday it is buying Marcellus driller Chief Oil & Gas plus associated non-operated assets from Tug Hill Operating for $2 billion in cash and approximately 9.44 million common shares. The total purchase price (given the current CHK stock price of $67/share) is roughly $2.6 billion. The combination makes Chesapeake a powerhouse driller in the northeast Pennsylvania Marcellus with 653,000 acres of leases.
Holy smokes! What just happened? For months (and months and months) the cumulative number of weekly permits issued to drill new shale wells in the Marcellus/Utica has fluctuated from the low teens to perhaps 30 total on the upper end. Last week, from Jan. 17-23, an amazing 61 permits were issued to drill new shale wells. Double the usual. Wow! Pennsylvania issued 24 new permits, Ohio issued 9, and blow-the-doors-off-we’ve-never-seen-so-many-permits-issued-in-one-week for West Virginia, the Mountain State issued 28 new shale permits.
Just a few weeks ago we told you a Shell rep said the mighty ethane cracker is 80% complete and the company is now searching for permanent employees to fill some 600 positions (see 
Houston-based Schlumberger (pronounced Shlum-Bur-Zhay) is the world’s largest oilfield services company. They’re the company a majority of exploration and production companies (drillers) call when they want a new well drilled. The #2 company on speed dial for drilling new wells is Halliburton, and they’re not even close in size to #1 Schlumberger. On Friday Schlumberger issued its fourth quarter and full-year 2021 earnings report, holding a conference call to discuss results. Of particular interest to us was information detailing Schlumberger’s work for M-U driller CNX Resources.
In May 2021 S&P Global Market Intelligence ran an article on which Marcellus/Utica drillers are likely targets to be acquired, and which drillers are doing the targeting (see 
This is quite clever. Last October the province of Quebec, Canada announced it will expropriate all of the rights for all oil and gas companies in the province to drill and extract oil and natural gas (see 
According to super-secret sources talking to Reuters, Chesapeake Energy is in advanced talks to purchase Chief Oil & Gas for $2.4 billion. MDN brought you the news last October that Chief, a private company owned by Texas wildcatter Trevor Rees-Jones, was shopping itself for $3 billion (see 
In September MDN broke the news that Rockdale Marcellus had filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the Western District of Pennsylvania (see 
Olympus Energy (formerly Huntley & Huntley) drills in the Greater Pittsburgh region, in Allegheny and Westmoreland counties. The company plans to drill a series of new wells (and well pad) in Washington Township in Westmoreland County. However, there’s a snag. Residents along a proposed road accessing the site don’t want the truck traffic on their narrow (18-foot-wide) road. Olympus doesn’t want to use an alternate route due to a sharp turn. Someone else proposed building a new access road, but it would cross a tributary that flows into the Beaver Run Reservoir (lots of red tape). The town is planning a couple of workshop meetings to figure out a solution.