Page 17 - NorthAmOil Week 02 2021

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Judge approves Chesapeake’s

bankruptcy plan

US A US judge has approved Chesapeake Energy’s and $1.7bn less in gas processing and pipeline
Chapter 11 bankruptcy plan this week, giving costs.
lenders control of the firm, whose value has risen Those creditors that opposed the bankruptcy
since it first filed for bankruptcy protection last plan said it gave certain backers, including
year. mutual fund Franklin Advisers, better returns.
Chesapeake was one of the most high-profile Representing unsecured creditors, Robert
casualties of last year’s collapse in crude prices, Stack was cited by Reuters as saying first-lien
filing for bankruptcy protection in June. The note holders stood to receive a 130% return on
coronavirus (COVID-19) pandemic proved one their claims, with Franklin in line for 41%, while
blow too many for a company struggling with unsecured creditors would only recover about
heavy debt from past overspending on assets. 4%. Unsecured creditors are owed more than
The court case in US bankruptcy court in $4.4bn. Stack went on to argue that the plan
Houston has been a contentious one, with improperly favours a few at the expense of many,
creditors offering sharply different estimates of but the comments were reported to have led to a
the firm’s enterprise value during its trial, and rebuke from Jones.
some opposing the bankruptcy plan. Ultimately, Indeed, Jones also refused to consider a
Judge David Jones said the firm’s value had risen last-minute offer by an investment group led by
to around $5.13bn as a result of strengthening Jefferies Financial Group to replace the plan that
energy prices. This figure was about $1bn higher favoured first-lien note holders and Franklin.
than the mid-point of the range recently offered “Management has dealt with an incredibly
by Chesapeake itself. difficult set of problems in an unprecedented
Oklahoma-based Chesapeake is now set to time,” Jones said. “I can’t imagine sitting on a
emerge from bankruptcy protection with about board or being in management given the events
$3bn in new financing, a $7bn reduction in debt over the last three years.”™

ENERGY TRANSITION

Occidental talks up carbon management plans

US OCCIDENTAL Petroleum, which set out details in the Permian Basin to remove CO2 from the
of how it would achieve net-zero emissions from atmosphere and store it underground. However,
its operations late last year, has provided more it will need to use the CO2 in its EOR operations
details on the role carbon capture and storage initially in order to help cover the cost of the
(CCS) will play in its plans. plant, which is predicted to be in the hundreds
The Houston-based company has set out one of millions of dollars. And Occidental is strug-
of the more ambitious emissions reduction tar- gling to pay down the debt it accrued thanks to
gets among oil companies. It is aiming to bring its $38bn acquisition of Anadarko Petroleum in
emissions from its own operations and energy 2019, so the plant is also anticipated to require
use – known as Scope 1 and Scope 2 emissions – external investment.
to zero on a net basis by 2040. It will then target Hollub told Bloomberg that she wants
bringing its total emissions – Scope 1, 2 and 3 Occidental to become a carbon management
– which includes the use of its products by cus- company.
tomers, to net zero by 2050. “We are not afraid of the transition out of oil
Occidental’s president and CEO, Vicki Hol- and gas, because we’re a part of that transition.
lub, said in the company’s 2020 climate report I do believe that in 15 to 20 years, more of our
that it would leverage its “expertise in carbon income will be from carbon management than
management and storage”, with net zero being from oil and gas,” she said.
the ultimate goal. Indeed, Occidental has long Occidental will license the DAC technol-
used carbon dioxide (CO2) in enhanced oil ogy it will use from Canada-based Carbon
recovery (EOR), and is now scaling up its car- Engineering.
bon ambitions. “It’s not a technology that’s a trial-and-error
The company is planning to build the world’s type of thing; you know it will work,” Hollub said.
first large-scale direct air capture (DAC) plant “We need to just get it to scale.”™

Week 02 14•January•2021 www. NEWSBASE .com P17