Chesapeake Energy, Southwestern Energy Advance Merger Talks

Chesapeake Energy has been focusing on natural gas assets by offloading its oil-producing assets since 2021.

SEATTLE (Oil Monster):  Leading U.S. natural gas producers Chesapeake Energy and Southwestern Energy are reportedly in final stages of talks regarding their merger into a single entity. The proposed merger will create a $17 million natural gas company, as early as next week, according to sources. The possibilities of a potential merger was first reported in October last year.

The merger is likely to create the largest natural gas-focused exploration and production firm in the U.S. by market value, overtaking EQT. Both the companies declined to comment on the development.

The deal comes amid weak U.S. natural gas prices. It must be noted that the U.S. natural gas futures recorded its biggest decline since 2006, mainly on account of record-high production, mild winter weather conditions and adequate inventories.

Chesapeake Energy has been focusing on natural gas assets by offloading its oil-producing assets since 2021.

The operating fields of both the companies are located adjacently. Appalachia's shale formations and the Haynesville basin in Louisiana are the primary production bases of Southwestern. Chesapeake also operates in these regions. The merger could help the combined entity to expand its footprints in the two key natural gas drilling regions.

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