Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.
California

Chesapeake Energy offloads Texas oil area with pivot to natural gas

Chesapeake Energy, the driving force behind the U.S. shale energy revolution, has signed a $1.4 billion deal to offload most of its Texas oil assets as it abandons crude oil production in favor of drilling for natural gas.

The company said Wednesday it has agreed to sell about 60% of its land in the Eagle Ford Basin in southern Texas to WildFire Energy. The sale marks Chesapeake’s first concrete deal in its strategic pivot from oil. Future production will be concentrated in the gas-rich shale regions of Louisiana’s Hainesville Basin and Appalachia’s Marcellus.

Based in Oklahoma chesapeake He helped pioneer horizontal drilling and hydraulic fracturing of shale rock that turned the United States into the world’s largest producer of hydrocarbons over the past decade. At its peak in 2008, the company’s market cap was $35 billion, making him the country’s second-largest gas producer after ExxonMobil. Its CEO at the time, Aubrey McClendon, became the highest paid executive in the United States.

The company has since deepened its exposure to oil, acquiring WildHorse Resource Development in 2018 for $4 billion, an asset currently on sale. Wildfire Energy is the reincarnation of his WildHorse and the President, Chief Executive Officer and Chief Financial Officer held senior positions in his previous company.

When energy demand and prices collapsed early in the Covid-19 pandemic, a shift to oil and land grabs with a string of debt forced Chesapeake into bankruptcy.

Chesapeake emerged from bankruptcy in 2021 and has gradually expanded its gas portfolio since then. A year ago, his CEO, Nick Dell’Osso, said of the company:Involved” Being in the Eagle Ford Basin to maintain a diversified portfolio.

But the company came under pressure from activist investor Kimmeridge Energy, which owns just under 2% of the stake. The group called it “Lack of strategic clarity’” he urged to focus on Gus.

Chesapeake announced last August plan Get out of oil and invest in gas. At the time, Dell’Osso said the decision was due to better returns on its gas assets, which have successfully reduced costs and improved efficiencies relative to oil. He also noted that U.S. exports of liquefied natural gas have surged following the global scramble for commodities fueled by the war in Ukraine.

On Wednesday, Dell’Osso said the sale “represents an important step in its journey to exit” from Eagle Ford, one of the largest shale regions in the United States.

Chesapeake sells 377,000 acres in Eagle Ford’s Brazos Valley in a deal with WildFire. The asset produces approximately 28,000 barrels of oil per day.

Dell’Osso said the company is “actively engaged with other parties” regarding the remaining positions in the basin.

“Chesapeake has finally completed its transformation to where it started as a natural gas company and will be able to use gas as a transition fuel over the next decade,” said managing director of energy consultancy Enverus. says Andrew Gillick.

Kimmeridge’s head of public equity, Mark Viviano, told the FT on Wednesday that the sale of Chesapeake represented “significant progress in executing its strategy of focusing on low-cost gas assets.”

https://www.ft.com/content/908e123e-59c5-4786-989d-f7bb86642441 Chesapeake Energy offloads Texas oil area with pivot to natural gas

Related Articles

Back to top button