Page 5 - NorthAmOil Week 09 2023

NorthAmOil COMMENTARY NorthAmOil

financing,” he told the Wall Street Journal. Scaling back
One deal that fell through was the $4.6bn Gas production is being scaled back, temporar-
purchase of private equity-backed gas producer ily at least. Chesapeake Energy recently said it
Rockcliff Energy by TG Natural Resources, would drop two gas rigs in the Haynesville region
which is 70% owned by Tokyo Gas. The buyer in 2023 and one rig in the Marcellus because of
was seeking to expand its operations in the low gas prices. Chesapeake is increasingly focus-
Haynesville shale play in east Texas and west ing on gas over oil, and in February said it would
Louisiana. This comes against the backdrop of sell oil assets in the Eagle Ford for $1.4bn to UK
Japan’s high dependence on LNG imports. chemical maker Ineos Energy.
“It’s officially dead,” a person familiar with the Comstock Resources, meanwhile, said it
talks told the Wall Street Journal. would drop two out of nine rigs from the
The newspaper’s sources also pointed to two Haynesville, and Southwestern Energy said
other deals that have been called off. Aethon it would run 10-11 rigs in the Haynesville
Energy Management, a private equity firm, has and Marcellus, a decrease from 13 rigs in
reportedly tried to sell its Haynesville gas assets, 2022.
but has so far failed. And Ascent Resources, one
of the US’ largest gas producers, which operates What next?
in the Utica shale region of Ohio, was preparing If gas prices stabilise, as they are expected to,
for an initial public offering (IPO), according to deal-making could proceed again, a Rystad
a Reuters reportfrom March 2022. It had report- Energy analyst, Atul Raina said. “When you try
edly been hoping for a market valuation of $6bn. to link gas prices to [mergers and acquisitions],
Ascent, which was co-founded by the late shale what is critical is having a consensus between
pioneer Aubrey McClendon, is backed by two buyers and sellers and that is only possible when
private equity firms, Energy & Minerals Group those prices are stable,” he told the Wall Street
and First Reserve. Journal.
The IPO never occurred, however, even In the longer term, the US gas market is
though gas prices rose, then fell in the early sum- expected to be robust as LNG terminals come
mer only to climb to a 14-year peak in August. online and as exports of the super-chilled fuel
Bloomberg, meanwhile, reported in March to Europe and Asia continue booming. In the
2022 that Ascent had been in merger negotia- shorter term, prices are projected by analytics
tions with gas producer Gulfport Energy, which firm Enverus to stay at $2.50 per mmBtu ($69.15
also focuses on the Utica. The deal, which never per 1,000 cubic metres) in the summer of 2023,
occurred, had been rumoured to be valued at a decrease from an earlier outlook of $3.50 per
$8bn. mmBtu ($96.81 per 1,000 cubic metres).™

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