Page 7 - NorthAmOil Week 41 2021

NorthAmOil INVESTMENT NorthAmOil

Chief reportedly exploring sale

PENNSYLVANIA PRIVATELY owned Chief Oil & Gas has been after reaching a record high in the second quar-
reported to be exploring a potential sale that ter. Nonetheless, there were still $18.5bn worth
could see it valued at more than $3bn, inclusive of transactions during the third quarter, top-
of debt. Last week, Reuters cited sources familiar ping the five-year quarterly average for M&A
with the matter as saying that the company had value of about $16bn, Enverus said. That average
hired an investment bank to begin a sale process. excludes Occidental Petroleum’s $38bn acquisi-
Appalachian Basin-focused Chief is con- tion of Anadarko Petroleum in 2019.
trolled by its founder, Trevor Rees-Jones, who Nonetheless, there may still be some appetite
started the company in 1994. It has grown to for further acquisitions, including in the Mar-
become one of the largest privately owned natu- cellus. In July, EQT bought another privately
ral gas producers in the US. Chief started out by owned producer in the region, Alta Resources,
operating in Texas’ Barnett shale formation, but for $2.9bn. That acquisition included 300,000 net
exited its position there via two sales, in 2006 and acres (1,214 square km), as well as output of 1
2008. It now operates in northeastern Pennsyl- bcf per day.
vania’s portion of the Marcellus shale play, where “There are still opportunities for public
it produces more than 1bn cubic feet (28.3mn company consolidation as well as potential pri-
cubic metres) per day of gas on around 600,000 vate sellers looking to capitalise on price levels
net acres (2,428 square km). for both gas and oil not seen in years,” stated
Energy prices remain at multi-year highs, Enverus’ director, Andrew Dittmar. “But the
boosting corporate valuations. However, the sense of urgency seems to have left the deal mar-
report of Chief’s potential sale comes as the wave ket. Through the end of the year, we are likely to
of mergers and acquisitions (M&As) that started see mostly smaller sized asset deals as companies
in the second half of 2020 is slowing down. Data trim their portfolios with the chance of an occa-
analytics firm Enverus said this week that M&A sional larger public company merger or private
activity fell 44% in the third quarter of this year, E&P sale.”™
PROJECTS & COMPANIES

ENN seals long-term LNG

supply deal with Cheniere

US-CHINA CHINESE utility ENN Natural Gas has signed a While China’s demand for LNG has been
new long-term LNG supply agreement with the increasing steadily, consumption is set to sky-
US’ Cheniere Energy. rocket in the coming months amid a deepening
The Chinese company said on October 11 power supply crunch. The country is grappling
that Cheniere had agreed to supply 900,000 with coal and gas shortages that have left two-
tonnes per year (tpy) of the fuel for 13 years thirds of the country’s provinces rationing power.
from July 2022 on a free-on-board (FOB) basis. China’s coal-to-gas transition has created
Cheniere said the purchase price was indexed to an imbalance within the power sector, leading
the Henry Hub price and included a fixed lique- to soaring coal prices that have left power gen-
faction fee. erators unwilling to operate at full capacity. The
The US company’s president and CEO, Jack government has long banked on a shift to clean-
Fusco, said the sale and purchase agreement er-burning gas to help fulfil its pledge to hit peak
(SPA) was a “milestone” in its efforts to sign carbon emissions by 2030 and achieve carbon
long-term supply contracts ahead of its final neutrality by 2060.
investment decision (FID) on the third stage of ENN chairman Wang Yusuo: “China is
its Corpus Christi LNG export terminal on the making great efforts to achieve the goal of peak
Texas Gulf Coast. The FID is expected in 2022. carbon emissions and carbon neutrality, boost-
Fusco said: “This SPA underscores the ing the reform of the natural gas market, and
strength of the global LNG market today, par- accelerating the structural adjustment of energy
ticularly in China.” consumption.”
China is widely expected to overtake Japan The executive added that he expected the two
this year as the world’s largest importer of LNG, companies to develop a strategic relationship
having imported 76.1mn tonnes of the fuel in the that would allow ENN to provide its clients with
12 months to June 30. This figure was up 19.6% “high quality resources and services, and to make
year on year from the 63.6mn tonnes of imports positive efforts to the realisation of peak carbon
recorded in the previous 12-month period. emissions and carbon neutrality in China”.™

Week 41 14•October•2021 www. NEWSBASE .com P7