Jul. 10, 2014, 3:21 PM
- A judge in Michigan has ruled that Chesapeake Energy (CHK -1%) must face a criminal trial on a charge of bid-rigging with Encana at a 2010 state land lease auction, citing evidence of a conspiracy between the companies that drove state lease prices down sharply.
- The court cited evidence including an email sent by a top ECA exec to a land man bidding on ECA’s behalf on the morning of a 2010 auction which refers to a lease area on offer, stating that “this is a Chesapeake area and we will not be bidding.”
- The ruling said evidence did not support a trial on two other charges involving private landowners, since although the companies discussed a deal to avoid competing for private land leases, they did not consummate one.
Jul. 7, 2014, 3:59 PM
- Chesapeake Energy (CHK -4.7%) suffers sharp losses as natural gas prices tumble to their lowest in nearly six months after weather forecasts over the weekend showed lower than expected temperatures ahead.
- Cooling patterns expected to hit the U.S. midwest and northeast over the next 6-10 days have investors betting utilities won't need to burn as much natural gas in the weeks ahead, as summer demand for electricity to run air conditioners eases.
- The absence of extreme heat has helped chip away at a record natural gas shortage following last year's unusually severe winter; last week, the EIA reported an eighth consecutive week of producers adding more than 100B cu. ft. of natural gas to storage.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, GASX, NAGS, DCNG
Jul. 7, 2014, 8:14 AM
- Rice Energy (RICE) agrees to acquire ~22K net acres and 12 developed Marcellus wells in Pennsylvania from Chesapeake Energy (CHK) for ~$336M.
- RICE says the acquisition represents a 24% increase in its net acreage position and a 47% increase to its Marcellus inventory of 325 net risked locations as of March 31; current net production total ~20M cf/day from seven wells plus five wells in various stages of development.
Jul. 3, 2014, 3:20 PM
- A recent surge of low-magnitude earthquakes in Oklahoma probably is the result of the underground disposal of vast quantities of wastewater generated by oil and gas extraction, according to a new study published today in the journal Science.
- The researchers also calculated that four of the highest-volume wells in Oklahoma are capable of triggering ~20% of recent central U.S. quakes, and found that such induced quakes could potentially occur more than 30 km from the well.
- The Cornell geophysics professor who led the study says the results suggest regulators and oil companies should avoid disposing of wastewater near major faults and do a better job monitoring the activity.
- Among energy firms with a significant Oklahoma presence: CHK, CLR, APA, DVN, SD, EOG, MRO, OKE, OKS, GPOR, WPX, WMB, WPZ, LPI, CWEI, NFX, NGL, COG, WLL, NBL, MPO, PQ, XEC.
Jul. 1, 2014, 10:27 AM
- Chesapeake Energy (CHK -6.6%) spinoff Seventy Seven Energy (SSE) advances nearly 4% in its first day of trading as a stand-alone company.
- SSE, whose board includes a former CIA executive director and Sunoco’s former refining chief, operates drilling rigs, fracking equipment and wastewater trucks from the Rocky Mountains to Appalachia.
- CHK shareholders received one share of SSE for every 14 CHK shares they owned.
Jun. 30, 2014, 12:42 PM
- New York’s cities and towns can block fracking within their borders, the state’s highest court rules, upholding the dismissal of lawsuits challenging bans in two small upstate towns.
- The ruling could lead the oil and gas industry to abandon fracking in New York, or it could mean that a patchwork of rules eventually may govern whether exploration can take place across the state; the case also may invigorate local challenges to the practice in states across the U.S.
- Parts of New York sit above the Marcellus Shale, some of whose top producers are: CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN.
Jun. 25, 2014, 3:43 PM
- Michigan's AG files another 12 charges in its land-leasing case against Chesapeake Energy (CHK +2.1%), bringing the total number of counts filed against CHK to 20 counts of false pretenses and conducting a criminal enterprise.
- According to the complaint, land options in northern Michigan were obtained to keep competing companies from leasing, and the leases later were canceled when competition for land ended.
- Encana last month agreed to pay $5M to settle civil litigation over its leasing activities and to not contest a charge it tried to collude with CHK, which has denied all charges.
Jun. 16, 2014, 4:28 PM| 5 Comments
Jun. 9, 2014, 12:58 PM
- Mac is back, as former Chesapeake Energy (CHK) CEO Aubrey McClendon's American Energy Partners announces $4.2B in acquisitions across shale formations in Texas, West Virginia and Ohio.
- The biggest deal is a ~$2.5B acquisition of ~63K net acres of oil and gas properties in Texas' southern Permian Basin from Enduring Resources.
- In two other acquisitions totaling $1.75B, he’s acquiring 27K net acres (with 40M cf/day of natural gas production) in the Utica shale region of Ohio, and he’s taking 48K acres (with 135M cf/day of nat gas production) in the Marcellus shale of West Virginia, both from Shell's (RDS.A, RDS.B) East Resources division and an unnamed private company.
- “He’s making bets on the same type of assets he did at Chesapeake," Oppenheimer's Fadel Gheit says. "The guy is consistent.”
Jun. 9, 2014, 11:49 AM
- EOG Resources' (EOG +1.1%) crude oil production surged 42% in Q1, and if business stays on course, as expected, the E&P company could enjoy a 32% jump in earnings this year, according to a weekend profile in Barron's.
- EOG's enterprise value is 6.9x this year's estimated EBITDA, roughly in line with the EV/EBITDA multiples accorded competitors Chesapeake Energy (CHK) and Devon Energy (DVN), but the story says it deserves a loftier multiple than the group, given its significant drilling inventory, superior production growth, lower debt ratio, and 15.6% return on equity vs. an average of 9.5% among peers.
- EOG raised its 2014 goal for growth in crude oil production to 29% from a prior 27%, and for total energy production to 12% from an earlier 11.5%, but its estimates often prove conservative, sparking expectations for more upward revisions as the year unfolds.
Jun. 9, 2014, 7:30 AM
- Chesapeake Energy's (CHK) board approves the spinoff of its oilfield services operations into a separate, publicly traded company called Seventy Seven Energy.
- The two companies will be separated through the distribution of SSE stock to CHK shareholders following the close of business June 30, as expected.
- CHK said in March it planned a spinoff of its oilfield services operations, which generated $2.2B in revenue last year.
Jun. 5, 2014, 12:57 PM
- Chesapeake Energy (CHK +1.8%) faces additional criminal charges from Michigan's AG for racketeering and fraud for "victimizing private land owners across northern Michigan."
- The complaint alleges that CHK tied up landowners in 2010 by telling them existing mortgages were no barrier to leasing their properties, then citing those same mortgages as justification for canceling almost all the leases after competition for them ceased.
- The allegations follow earlier accusations that CHK colluded with Encana (ECA +0.3%) to divide the Michigan counties in which they had bid for exploration rights in 2010, driving down prices.
Jun. 5, 2014, 11:59 AM
- Rose Rock Midstream (RRMS +0.2%) agrees to acquire crude oil trucking operations from Chesapeake Energy (CHK +1.1%) for an undisclosed sum, in a deal that will expand RRMS' reach into key oil producing shale basins.
- The deal includes 124 trucks, 122 trailers and other equipment in Texas, Oklahoma and Ohio; following the closing, RRMS will operate a fleet of more than 250 trucks with ~350 employees, servicing the Bakken, DJ/Niobrara, Eagle Ford, Granite Wash, Mississippi Lime, Permian, San Juan and Utica plays.
Jun. 2, 2014, 3:31 PM
- Walter Energy (WLT -6.3%) shares aren't helped by the coal producer's statement that new EPA proposals aimed at controlling carbon emissions from U.S. power plants should have no material impact on the company; in fact, WLT is down more than peers: CNX +1.1%, BTU +0.1%, CLD -0.3%, ACI -2.8%, ANR -4.6%.
- Long-term losers also will include electric companies that burn lots of coal - such as American Electric Power (AEP +0.1%), Duke Energy (DUK -0.3%), Southern Co. (SO -0.3%) and NRG Energy (NRG -0.1%) - but stiff regulations have been expected for some time.
- Likely winners include companies that pump natural gas and those that use it as their primary fuel, such as Calpine (CPN +0.3%), and companies that operate nuclear plants that generate little carbon but have been expensive to run, such as Exelon (EXC -1%), hope that their aging plants will become more competitive.
- A reduction in coal-fired capacity would increase utilities' demand for natural gas by 3B-10B cf/day from 22B cf/day now, potential benefiting major natural gas producers like Chesapeake Energy (CHK +2.1%), Cabot Oil & Gas (COG -0.8%) and Range Resources (RRC -0.6%).
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, GASL, DUG, IYE, GASX, PXJ, FENY, RYE, UPW, FUTY, RYU, FXN, FXU, DDG, SDP
May. 29, 2014, 8:42 AM
- Oklahoma Gov. Fallin signed legislation yesterday that will raise taxes on the state's oil and gas wells but was supported by the state's largest oil and gas producers, Devon Energy (DVN), Continental Resources (CLR) and Chesapeake Energy (CHK).
- The new law takes effect in 2015 and will tax energy companies at a 2% rate on a well's oil and gas output for the first three years of its life; after that, the tax rate rises to 7%.
- Critics say the higher rate still falls short of what's needed to help fund education and infrastructure improvements.
May. 27, 2014, 2:42 PM
- Chesapeake Energy (CHK +2.1%) is fighting back against collusion charges, accusing Michigan authorities of cherry picking internal documents to support their contention it colluded with Encana (ECA -0.9%) in dividing up oil and gas lease bids in the state.
- Michigan authorities have charged the companies with driving down the price of oil leases by conspiring over which counties each would seek resource exploration rights during a May 2010 auction.
- Among the evidence the state's lawyers say back up their accusations are CHK e-mails suggesting the firms "throw in 50/50" on the bids, but in new court filings, CHK cites other parts of the same e-mails to show former CEO Aubrey McClendon was open to competition.
CHK vs. ETF Alternatives
Chesapeake Energy Corp is a natural gas and oil exploration and production company. It explores, develops and acquires properties for the production of natural gas and crude oil from underground reservoirs and also provides marketing & midstream services.
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