Can You Say Louisiana? Chesapeake And Vine Is Not A Hollywood Intersection -- August 12, 2021

Updates

August 13, 2021: US gas acquisitions signal Gulf coast strategy shift. Link here.

Chesapeake Energy's $2.2bn bid for Vine Energy is the latest bet by large US natural gas producers on the future of the US Gulf coast market, signaling a shift away from the pipeline-constrained northeast. 

Chesapeake's planned acquisition of Vine will nearly triple the company's output from the Haynesville shale, a prolific gas-bearing formation underlying east Texas and northern Louisiana. The combined company will have 1.6 Bcf/d (45mn m³) of Haynesville production, all of which may eventually find a home on the nearby Gulf coast, Chesapeake said this week. Those supplies can feed industrial demand and US LNG export terminals. 

The deal, which should close in the fourth quarter of this year, follows Southwestern Energy's $2.7bn bid for privately held Haynesville producer Indigo Natural Resources. Southwestern, an Appalachian producer, would gain a foothold in the Haynesville, diversifying its assets and increasing its access to Gulf coast markets. That deal was expected to close later this month. 

Those transactions underscore a renewed interest in the Haynesville as Nymex prompt-month gas prices rebounded from last year's lows and exports of US LNG surged. It also highlights the long-running frustration with regulators in the northeastern US — home to the Marcellus shale, the largest US gas field by volume.

 Much more at the link.

Original Post 

Chesapeake doubles down on US shale gas with Vine Energy buy. Link here to Reuters.

Chesapeake Energy Corp agreed to buy Louisiana natural gas rival Vine Energy Inc  for $615 million, betting on the shale field's proximity to the U.S. Gulf Coast export hub.

Dealmaking in the oil and gas sector has jumped this year as prices rebounded due to the vaccine-driven economic recovery. U.S. oil futures were up about 1.44% on Wednesday at $69.27 a barrel, an increase of about 63% from year-ago levels.

Shale operators have been pitching scale as a way to cut costs, with top gas producer EQT Corp recently agreeing to buy Appalachian rival Alta Resources for $2.93 billion and Southwestern Energy Co purchasing privately held Indigo Natural Resources for about $2.7 billion.

Chesapeake has offered 0.2486 share and $1.20 in cash for each stock of Vine, implying a per-share value of $15. That represents a less than 1% premium to Vine's last close of $14.88.

This is absolutely fascinating. This just doesn't quit. I didn't know anything about Louisiana until the Continental Resources story surfaced. 

Absolutely amazing. 

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Coal

Coal prices soar as Europe grapples with supply squeeze. Link here.