The US natural gas and oil producer Chesapeake Energy Corporation has entered into an agreement with Southwestern Energy to take over the company in a US$7.4bn deal, becoming one of the biggest natural gas producers in the United States. The agreement establishes that Chesapeake shareholders should own about 60% of the combined company, while Southwestern shareholders should retain approximately 40%. On the other hand, Southwestern shareholders will receive 0.0867 shares of Chesapeake common stock for each outstanding share of Southwestern common stock at closing.
The transaction, valued at US$6.69/share, boosts the combined market capitalization to US$24bn, creating a company with a current production of approximately 7.9 Bcfe/d (1.4 Gboe/d) with more than 5,000 locations and 15 years of inventory. The new combined company is expected to be renamed (not yet disclosed). Although the deal has been approved by the boards of both companies, it still needs approval from its shareholders and it is expected to close in the second quarter of 2024.
In November 2021, Chesapeake Energy Corporation completed the acquisition of Vine Energy, which developed gas assets in the Haynesville and Mid-Bossier shale plays in Northwest Louisiana (United States). The transaction, estimated at US$2.2bn, added approximately 370 premium 50% rate of return drilling locations for Chesapeake, helping the group become a dominant supplier of gas to premium markets in the Gulf coast and abroad.