Chesapeake moves forward in US merger bonanza

Chesapeake Energy Corporation has signed an agreement to acquire Southwestern Energy for USD 7.4 billion, the US oil and gas player announced on Thursday.

The all-stock deal will see the buyer grow its net production to more than 7.9 bcf equivalent per day and annual operational overhead of around USD 400 million.

Southwestern Energy’s assets are mostly in Appalachia’s shale formations and the Haynesville Basin in Louisiana.

Chesapeake Energy Corporation also has plays within these regions.

The merged company will overtake EQT Corporation as the USA’s largest gas-focused upstream entity.

“This powerful combination redefines the natural gas producer, forming the first US based independent that can truly compete on an international scale,” said Nick Dell’Osso, president and CEO of Chesapeake Energy Corporation.

“The union creates a deep inventory of advantaged assets adjacent to high demand markets, allowing for the application of proven operational practices and the power of an investment grade quality balance sheet to drive significant synergies benefiting energy consumers and shareholders alike.”

The move follows several large recent mergers in the US market in 2023, including Occidental Petroleum Corporation acquiring local competitor CrownRock Minerals for USD 12 billion, Chevron buying Hess International for USD 60 billion and ExxonMobil purchasing Pioneer Natural Resources for USD 64 billion.

In August 2023, Chesapeake Energy Corporation agreed to sell its remaining Eagle Ford assets to SilverBow Resources for USD 700 million.