Enverus Blog

Insights across the energy value chain

The push for more CNG vehicles and all around natural gas consumption just isn’t going to happen soon enough.  Chesapeake, with $13.2 billion of debt, drama surrounding investigations into their chief executive’s personal loans backed by stakes in company operated wells, stocks down 27% in 2012, and natural gas encompassing 83% of the company’s reserves, it’s safe to say they are in need of a financial rebound.  According to Chesapeake’s May investor presentation, the energy company needs to generate $9-11.5 billion in extra revenue by year-end.  One of which is to sell various non-core oil and gas assets.  Last week, some of those assets were released and to no surprise are actually very desirable.  Just take the 504,000 acres in the DJ Basin of Colorado for instance.

Chesapeake’s DJ Basin Assets up for Grabs

Now by looking at the Ro map below, one can see that the majority of the DJ Basin acreage lies around the Wattenberg field.  The field lies atop a geothermal anomaly perfect for hydrocarbon generation.  In addition to acreage, the DJ deal would also include 29 company operated wells and interest in 24 non-operated wells.

Chesapeake’s DJ Basin Assets up for Grabs

Chesapeake’s DJ Basin Assets up for Grabs

I would not be surprised to see a merger or perhaps even a complete company acquisition.  There are rumors of such.  However, with Chesapeake being the largest holder of onshore leases, top competitor in almost every shale play in the U.S., and mounds of debt, it would probably take one of the major oil and gas corporations like Exxon Mobil, Chevron, or Shell to afford the buyout.  Stay connected with this and other operator news and activity by visiting DNA in Drilling Info website.

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