Page 8 - NorthAmOil Week 03 2022
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NorthAmOil                                    INVESTMENT                                          NorthAmOil


       Chesapeake reportedly




       close to Chief acquisition




        US               US  shale  driller Chesapeake Energy  is  Rystad Energy reported this week that upstream
                         reported to be in advanced talks over acquir-  mergers and acquisitions (M&As) were up 70%
                         ing privately owned Marcellus shale player  on 2020 levels in 2021. It was also prominent in
                         Chief Oil & Gas. Citing sources familiar with  the US shale patch, which saw a wave of consol-
                         the matter, Reuters reported on January 19  idation play out since late 2020 that is still ongo-
                         that Chesapeake could buy Chief for around  ing, albeit slowing down.
                         $2.4bn including debt.                 Indeed, Chesapeake also purchased Vine
                           According to the sources, a deal could be  Energy last year for $615mn as it sought to pivot
                         announced soon, though no news emerged this  back towards natural gas production following
                         week. However, the sources also cautioned that  its emergency from Chapter 11 bankruptcy
                         negotiations between the two companies could  protection in February 2021. Gas-focused
                         still fall apart.                    M&As also played out more broadly across the
                           The news comes after Reuters reported in  industry, with major shale gas players EQT and
                         October that Chief was up for sale amid stronger  Southwestern Energy also acquiring other gas
                         commodity prices, which had helped improve  producers over the past few months.
                         company valuations – though it said at the time   Chief has around 600,000 net acres (2,428
                         that a sale could value the company at more than  square km) in Pennsylvania’s Marcellus shale
                         $3bn including debt. As a result of the improved  and produces more than 1bn cubic feet (28.3mn
                         price environment, numerous producers  cubic metres) per day of gas from over 375 wells.
                         had become more willing to be sold to larger  According to the company’s website, it is cur-
                         companies.                           rently operating a one-rig drilling programme
                           The trend was a global one – consultancy  in the region.™







       Delfin targeting FID on FLNG project in 2022




        GULF OF MEXICO   PRIVATELY owned Delfin Midstream is tar-  discussions for more than we need for the first
                         geting a final investment decision (FID) on its  vessel. We just need to get a couple of those guys
                         planned floating LNG (FLNG) project in the  across the line.”
                         US Gulf of Mexico, offshore Louisiana, later this   Delfin FLNG entails up to four liquefaction
                         year.                                vessels that would each be able to produce up to
                           The news, which was reported by Reuters,  3.5mn tonnes per year (tpy) of LNG, or a com-
                         comes as no surprise given that the company  bined total of up to 13mn tpy. Gas would be sup-
                         already said in mid-2021 that it had pushed back  plied to the vessels via existing offshore pipelines
                         the FID to later in 2021 or 2022. The project has  – Delfin purchased UTOS, the largest offshore
                         run into several delays, which started before the  gas pipeline system in the Gulf, for the project
                         onset of the coronavirus (COVID-19) pandemic  in 2014. According to Poston, each vessel would
                         as the company worked through the regulatory  cost about $2bn and the first would be expected
                         review process and looked for LNG buyers to  to enter service around 2026, four years after the
                         sign offtake agreements. The pandemic initially  FID.
                         made potential buyers even more scarce. Now,   The Delfin project also includes a brownfield
                         though, the outlook appears brighter despite the  deepwater port that would require minimal
                         delays.                              additional infrastructure investment, according
                           “This is the best macro environment that the  to the company’s website.
                         LNG business has ever seen,” Delfin’s CEO, Dud-  Delfin also owns a second gas pipeline system
                         ley Poston, told Reuters this week, adding that he  in the Gulf, Grand Chenier, which can either be
                         was “very confident” the company would reach  used for a second deepwater port for the com-
                         FID this year.                       pany’s planned Avocet FLNG project or for an
                           “We’re now seeing the most sustainable  expansion of Delfin LNG. Poston told Reuters
                         interest from LNG buyers ... that we’ve seen in  this week that after the first FID, Delfin would
                         years and Delfin only needs two to three buy-  start working on Avocet, which would add two
                         ers,” Poston said. “We’re already in contractual  more 3.5mn tpy liquefaction vessels.™



       P8                                       www. NEWSBASE .com                        Week 03   20•January•2022
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