Energy Prospectus

CHK to buy Swn??

Deal would make number 1 gasser

Rumors might help other gassers

if this deal does go through sounds like chk may sell off would it be better to sell chk now and put money in other gassers?

Both companies have not announced a deal. Please post a link if you see one.

I doubt the combination would have more natural gas production than EQT.

The story appeared in reuters, chk approached swn, that's it

https://www.reuters.com/markets/deals/natgas-producer-chesapeake-explores-buying-southwestern-energy-sources-2023-10-17/

The sources asked not to be identified because the matter is confidential. Chesapeake and Southwestern did not immediately respond to a request for comment.

An acquisition of Southwestern would be transformative for Chesapeake, which has been snapping up small rivals in the last two years. 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.

The deal would also be a reversal of sorts. Southwestern acquired some of its acreage in West Virginia and Pennsylvania from Chesapeake for $5.4 billion in 2014.

In 2021, Chesapeake emerged from a bankruptcy which epitomized the boom and bust of debt-laden exploration and production companies that expanded aggressively in the shale patch. Since then, Chesapeake has been shedding oil-producing assets to focus on its competence in natural gas. It has a market value including debt of about $13 billion.

U.S. natural gas prices have been sluggish in recent months, as oversupply and warmer weather erode producers' profitability. Some analysts expect prices to go up in the next few months, as a pick-up in U.S. natural gas exports creates more domestic scarcity.

Dealmaking in the energy-producing sector has been heating up as companies race to secure the most lucrative acreage. Exxon Mobil Corp (XOM.N) last week agreed to acquire Pioneer Natural Resources (PXD.N) for $60 billion in stock, placing a big bet on the Permian basin, the biggest U.S. oilfield.

Reporting by David French in New York Editing by Greg Roumeliotis and David Gregorio

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Yes chk will go down and swn will go up, in fact Swn led all gainers today up 9 %

Even though the market will punish CHK in the short term, Dan's models will have a 25 % higher target price for CHK after the acquisition since the model marks up ebitda and ignores cap ex

So short term weakness followed by long term strength if you buy into higher ng in 2024 and 2025

I bet CHK wants to use its shares as monopoly money

So if you are a trader, sell chk now and buy on the announcement of the acquisition. This ignores taxes so dont take it as advice

Crk, gpor, sbow and ar might go up if we see deals in the ng space

good analysis. in a nontaxable account anyway so taxes no problem. thanks.

Seeking alpha indicate that Chesapeake Energy is interested in acquiring Southwestern Energy. The discussions are reportedly at an early stage, so the deal may not end up happening.

A deal would generally make strategic sense with the two companies sharing a focus on natural gas development in Appalachia and the Haynesville Shale. Chesapeake has less production than Southwestern, but has a healthier balance sheet and a better cost structure.

If a deal is done, I could see it being an all-stock deal valuing Southwestern at $7.50 to $8.00 per share. This assumes a roughly $3.75 NYMEX long-term natural gas price, which is the price I believe that deals are being made at.