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Cheasapeake Energy announced Wednesday that it will acquire Vine Energy in a deal valued at around $2.2 billion. Vine produces natural gas in the Haynesville and Mid-Bossier shale plays in Northwest Louisiana, and the zero-premium deal will increase Chesapeake’s 2022 natural gas production from roughly 2.09 billion cubic feet per day to 3.04 Bcf/d, an increase of more than 45%. Chesapeake exited Chapter 11 bankruptcy in February, shedding $7.8 billion in debt. The deal, comprising 92% stock and 8% cash, will bring Chesapeake’s net debt $1.1 billion higher to $1.7 billion when it closes in the fourth quarter. *** The US Energy Information Administration expects working gas storage inventories will enter the winter heating season at below-average levels. The government agency projects storage levels will reach 3,592 billion cubic feet by Nov. 1, which is 159 Bcf below the prior five-year average. The EIA cited above-average withdrawals of gas during the winter, below-average injections during the summer, low dry gas production growth, and elevated export volumes as contributing factors. *** Analysts are expecting an above-average storage build of 49 billion cubic feet for the week ended Aug. 6 when the EIA reports data Thursday, according to a Reuters poll. The expected injection compares with the five-year average injection of 42 Bcf and last year’s 55 Bcf build. Milder-than-normal temperatures pushed cooling degree days to 80 last week, below the 88 CDDs 30-year average for the period. Meanwhile, models for the week ending Aug. 13 are for a build of 26 Bcf, with a range of 9 Bcf to 45 Bcf. That compares with a five-year average increase of 42 Bcf and a 45 Bcf injection during the same week last year.

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Tue, Jun 6, 2023