CNX CEO Nick Deluliis Talks About “Hard Truths” in M&A at DUG East

Yesterday CNX CEO Nick Deluliis was one of the keynote speakers at the annual DUG (Developing Unconventional Gas) East event, held virtually this year. Normally DUG is held at the Convention Center in Pittsburgh. Deluliis’ talk was wide-ranging, but much of it concentrated on mergers and acquisitions, particularly M&A in the Marcellus/Utica. Deluliis is not much interested in horizontal M&A for CNX, but he is intrigued by vertical M&A.
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Judge Allows Class Action Against EQT/Rice 2017 Merger to Proceed

In June 2019 the Cambridge (Massachusetts) Retirement System sued EQT claiming EQT’s executives had made false and misleading statements about their 2017 purchase of Rice Energy–claims about cost efficiencies that never materialized, and claims about the location of Rice leases that were not as close to EQT’s acreage as claimed (see Mass. Retirement Fund Sues EQT for Plummeting Stock Price). In a word, Cambridge alleged fraud on the part of EQT’s executives and seeks to turn their lawsuit into a class action on behalf of all investors who owned EQT stock at that time.
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Southwestern Completes Montage Merger, Now 3rd Largest M-U Co.

In August Southwestern Energy announced it is buying out and merging in Montage Resources in an all-stock deal (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). As of Friday Montage, which was itself a merger of two companies (Blue Ridge Mountain Resources and Eclipse Resources) is no more. Montage is now a part of Southwestern.
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EQT’s Toby Rice Discusses Chevron Deal, Ponders Pipe Assets

Yesterday Pittsburgh Business Times‘ ace reporter Paul Gough got EQT CEO Toby Rice to open up and talk about the company’s recently announced deal to buy Chevron’s considerable Marcellus/Utica assets (see EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock). Rice said the Chevron deal fits like a glove and investors will love it. He offered some insight into the bidding process and his thoughts on the pipeline assets that are part of the deal.
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Montage Resources Releases Last Quarterly Update – Merging Next Wk

After a shareholder vote scheduled for next Thursday, Nov. 12, Montage Resources will be no more. The company is selling itself to Southwestern Energy in an all-stock deal worth $857 million (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). Yesterday Montage issued what will be its very last quarterly update. What does the update show?
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Southwestern Expects to Close on Montage Purchase Nov. 12

Southwestern Energy Company released its third-quarter 2020 update last Friday. The company previously announced it is buying out and merging in Marcellus/Utica driller Montage Resources. During the 3Q conference call, CEO Bill Way said the company expects to close on the deal immediately after Montage Resources shareholders vote on the deal November 12. Also from the 3Q update: Southwestern managed to reduce the cost of drilling for one of their PA Marcellus wells down to $491 per lateral foot!
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After Floating $350M in New Stock, EQT Floats $350M in New Bonds

Last week EQT Corporation announced a deal to buy Chevron’s considerable Marcellus/Utica assets (land and wells) for the lowball price of $735 million (see EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock). EQT also announced, on the same day, they are floating up to 23 million new shares of company stock to help pay the purchase price, hoping to raise ~$350 million. On Friday EQT announced it will float new bonds (debt) to raise another $350 million, also meant to help pay for the Chevron purchase.
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EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock

Looks like the rumors were true, at least one of them. Yesterday EQT announced it has cut a deal to buy Chevron’s considerable Appalachian assets for $735 million. The Reuters rumor from September said EQT had offered $750 million (see Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets). Also yesterday, EQT floated up to 23 million new shares of stock, on offer for $15.50 per share, attempting to raise ~$350 million to use toward the Chevron purchase.
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Stop Press: Sources Say EQT Trying to Take Over CNX Resources

Bloomberg is reporting insider sources say EQT, already the biggest natural gas producer in the country (and pureplay driller in the Marcellus/Utica), has sent a takeover proposal to CNX Resources, another major Marcellus/Utica driller. Friendly? Hostile? Who knows. In September inside sources told Reuters that EQT had made a bid on Chevron’s extensive M-U acreage (see Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets). Would/could EQT actually end up buying both? Seems like a stretch.
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American Energy Partners Buys 230+ SWPA Conventional Gas Wells

American Energy Partners, Inc. (AEPT), based in Allentown, PA, is a small but diversified company. They have their fingers in a number of different oil and gas pies, including subsidies in drilling, remediation, water, valuation services, and education. AEPT announced a new deal yesterday to buy a producer with 230+ conventional natural gas wells in western Pennsylvania.
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What EQT Purchase of Chevron’s M-U Assets Means, IF it Happens

Nearly a month ago sources talking to Reuters let it slip that EQT has offered $750 million for Chevron’s $6.5 billion worth of Marcellus/Utica assets (see Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets). Since that time we’ve not heard a peep about negotiations and whether or not Chevron is seriously considering the offer. Let’s do a little speculating. What if Chevron does accept that offer? What does it mean for investors and others with a stake in the outcome?
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Dominion Expects to Close Most (Not All) Buffet Pipe Deal Nov. 1

In July Dominion Energy announced it is throwing in the towel and canceling the 600-mile Atlantic Coast Pipeline (ACP) project that would have stretched from West Virginia to North Carolina. The company also announced it is selling its pipeline business to Warren Buffett (see Dominion Cancels Atlantic Coast Pipe, Sells Pipe Biz for $9.7B). Dominion announced yesterday it expects to close on most, but not all, of its pipeline deal with Buffet on Nov. 1.
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Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets

Last December Chevron announced it was writing down over $10 billion worth of its U.S. onshore shale assets, with $6.5 billion of that number coming from its Marcellus/Utica assets. Also in December, the company posted for sale ALL of their M-U assets (see Chevron Confirms M-U Assets for Sale, Asks Vendors to Avoid Media). In February Chevron hired investment bank Barclays to help shop their M-U assets with the bids due in August (see Bids for Chevron’s 550K M-U Acres & 500 Wells Due in Mid-August). “Sources” talking to Reuters have let it leak that EQT has offered $750 million for Chevron’s $6.5 billion worth of assets.
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Marcellus Pipe Builder Otis Eastern Sells Itself to Atlanta Co.

Pipeline builder Otis Eastern, headquartered in Wellsville, NY (western part of Upstate) has built a lot of pipelines throughout the northeast since its founding in 1936. In recent years the company has worked on a number of Marcellus/Utica projects, including Energy Transfer’s Mariner East 2 project and National Fuel Gas Company’s Marcellus Gas to Market project. Otis is selling itself for an undisclosed amount to a much larger company, Artera Services, LLC, based in Atlanta, Georgia.
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