Will the Chesapeake deal change the US gas sector?
Chesapeake wants to acquire rival Southwestern Energy for $7.4 billion, becoming the largest gas producer in the United States. All the details
The American energy company Chesapeake Energy announced today that it intends to purchase all of its rival Southwestern Energy through a transaction valued at 7.4 billion dollars: the operation will make Chesapeake the largest natural gas producing company in the United States (currently the second), surpassing EQT Corp.
ALL THE MAXI AGREEMENTS IN THE US ENERGY SECTOR
The move also follows a series of multibillion-dollar takeover deals in the US energy sector, such as that between oil companies ExxonMobil and Pioneer Natural Resources (value: $60 billion) and that between Chevron and Hess (value: $53 billion ).
Chesapeake offered a price of 6.69 dollars for each Southwestern share: according to calculations by Reuters – which last October exclusively revealed the negotiations between the two companies – this is a value 3 percent lower than that of the last stock market close.
The deal is expected to close in the second quarter of 2024.
WHAT THE ANALYSTS THINK
The agreement was evaluated positively by financial analysts. Also because US natural gas prices are expected to benefit from an increase in exports next year after an overall weak 2023 due to very abundant production, stable consumption and increased inventories.
CHESAPEAKE FOCUSES ON NATURAL GAS
Southwestern's takeover bid represents Chesapeake's biggest attempt to strengthen its position in the natural gas sector – while simultaneously breaking away from oil extraction – after its bankruptcy in 2021. Last year, however, the company a greater presence has already been guaranteed in the shale deposits (this is the name of the shale rocks from which hydrocarbons are extracted, of which the United States is rich) in the north-east of the country with the acquisition of Chief E&D for 2.5 billion dollars.
Southwestern's gas production is concentrated in shale formations in the Appalachia region and the Haynesville Basin of Louisiana in the southern United States.
– Read also: Here's how the United States has surpassed Russia with LNG exports. And China…
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/chesapeake-acquisizione-southwester-energy/ on Thu, 11 Jan 2024 15:14:00 +0000.