Chesapeake Buys Southwestern To Create A Shale Gas Powerhouse

Nick Dell'Osso, president and chief executive officer of Chesapeake Energy Corp., speaks during the 2023 CERAWeek by S&P Global conference in Houston, Texas, US, on Monday, March 6, 2023. Photographer: Aaron M. Sprecher/Bloomberg

The past 15 years have been a long and winding road for Chesapeake Energy, one that included an effort to shift from a pure natural gas play to a more oily portfolio, a chapter 11 bankruptcy filing, and a switch back to natural gas again as LNG exports emerged as the biggest growth driver in the U.S. industry. Now comes news that Chesapeake has agreed to purchase Southwestern Energy to form a shale gas-focused giant in an all-stock deal valued at $11.5 billion.

The new company sports a combined market capitalization as of January 11 of $17.4 billion, making it one of the biggest shale natural gas producers in the U.S. “This powerful combination redefines the natural gas producer, forming the first U.S. based independent that can truly compete on an international scale,” Chesapeake Chief Executive Nick Dell’Osso said in a release.

The merger becomes the latest in a string of major M&A deals focused on U.S. shale assets, coming on the heels of ExxonMobil’s buyout of Pioneer Natural Resources and Chevron’s purchase of Hess Corp., among other, smaller deals.