EXCLUSIVE Chesapeake Energy nears $2.4 billion deal to buy Chief Oil & Gas – sources

A view of a well site that sits atop the natural gas-rich Marcellus Shale formation in western Pennsylvania outside of Union City, Pennsylvania, U.S., October 23, 2020. REUTERS/Shannon Stapleton/File Photo

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Jan 19 (Reuters) – Chesapeake Energy Corp (CHK.O) is in advanced talks to acquire private natural gas producer Chief Oil & Gas for about $2.4 billion including debt, people familiar with the matter said on Wednesday. .

A deal for Chief Oil & Gas, founded and controlled by Texas “wildcatter” Trevor Rees-Jones, could be announced as early as this week, the sources said. In wild drilling, exploration wells are dug in areas that are not known to be natural resource fields.

The acquisition by Chesapeake, a U.S. shale gas and oil producer that only emerged from bankruptcy last year, underscores the recovery of parts of the energy industry as natural resource prices hit highs. multi-year highs.

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The sources, who spoke on condition of anonymity to discuss private information, warned that negotiations could still fall apart at the last moment.

A chief oil and gas spokesperson declined to comment. Chesapeake did not immediately respond to a request for comment.

Reuters reported in October that Chief Oil & Gas was up for sale, amid soaring energy prices that pushed up valuations of companies in the sector.

If completed, it would be the second acquisition Chesapeake has made since February 2021, when it emerged from one of the largest oil and gas producer bankruptcies in recent years. In November, Chesapeake completed the purchase of Vine Energy for $615 million.

Since emerging from Chapter 11 bankruptcy protection, Chesapeake has focused on natural gas production, a return to its roots as a company founded in 1989 by savages Aubrey McClendon and Tom Ward.

Rees-Jones started Chief Oil & Gas in 1994. The company operates in the Marcellus Shale in northeastern Pennsylvania and owns approximately 600,000 net acres, producing more than 1 billion cubic feet per day (bcf/d ) of natural gas.

The sale of Chief Oil & Gas would be the latest combination of U.S. natural gas producers in recent months.

Private company Alta Resources was sold in July to EQT Corp (EQT.N) for $2.9 billion, and Southwestern Energy Co (SWN.N) acquired Indigo Natural Resources for $2.7 billion in September and GEP Haynesville for $1.85 billion in December.

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Reporting by Shariq Khan in Bengaluru and David French in New York; Editing by Kenneth Maxwell

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