Southwestern, Chesapeake Energy close to $17 billion merger - source

southwestern, chesapeake energy close to $17 billion merger - source

FILE PHOTO: Chesapeake Energy logo is seen on smartphone in front of displayed stock graph in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -U.S. natural gas producer Chesapeake Energy and peer Southwestern Energy are nearing a merger that would create a nearly $17 billion company, a person familiar with the matter told Reuters on Friday.

The deal could come together as soon as next week provided the talks do not fall apart, the source said, requesting anonymity since talks are private.

Reuters had reported in October that Chesapeake was exploring an acquisition of Southwestern.

A potential deal could create a company that would overtake EQT as the largest natural gas-focused exploration and production firm in the U.S. by market value, at a time when shale companies seeking scale and efficiencies are fueling a rapid consolidation in the energy sector.

Shares of Southwestern and Chesapeake closed more than 7% and 3%, respectively, after the Wall Street Journal reported the talks earlier in the day.

The companies did not immediately respond to requests for comment from Reuters.

The deal talks come against the backdrop of a sluggish U.S. natural gas prices. U.S. natural gas futures ended 2023 with the biggest percentage decline since 2006 due to record production, ample inventories and a mild winter.

Chesapeake has been shedding oil-producing assets to focus on its competence in natural gas since emerging from bankruptcy in 2021.

The two companies are neighbors; most of Southwestern’s production is in Appalachia’s shale formations and the Haynesville basin in Louisiana, where Chesapeake also operates.

(Reporting by Tanay Dhumal in Bengaluru and Anirban Sen in New York; Editing by Pooja Desai and Sriraj Kalluvila)

News Related

OTHER NEWS

Disrupt Burrup protesters searched and phones seized

Disrupt Burrup Hub group say police have issued move-on notices prohibiting access to the WA site. A group of climate activists and filmmakers say their phones have been seized during ... Read more »

The generation driving a ‘megatrend’ of poor mental health in Australia

As individuals, we have unique experiences that affect our mental health and wellbeing, but what about the collective experiences that influence each generation? The mental health of Australians has been ... Read more »

Geraldton meatworks set to reopen after five years in bid to meet chilled meat demand from Asia, Middle East

Syed Ghazaly wants to see the Geraldton abattoir reopen early next year to process 1,000 sheep a day. (ABC Mid West Wheatbelt: Chris Lewis) The new owners of a mothballed ... Read more »

Blues seek ‘growth’ as pre-season begins; new Hawk aims to be AFL’s serial pest

Carlton coach Michael Voss says he and his players understand there are heightened expectations on them, but insists the Blues are ready to develop individually and in their game plan. ... Read more »

Bulldogs continue signing frenzy with swap deal

The Bulldogs’ off-season signing frenzy is set to continue with the club reportedly set to land Cronnor Tracey in a swap deal. The Sydney Morning Herald reports Tracey is expected ... Read more »

Customers to weigh in as Optus disruption comes under microscope

Consumers and impacted businesses are being urged to have their say on the Optus outage, with the federal government laying out the terms of reference for its review into the ... Read more »

Released detainee unable to be contacted by authorities

It has been revealed a released immigration detainee is unable to be contacted by authorities. Border Force has referred the matter to the Federal Police as authorities are attempting to ... Read more »
Top List in the World