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Expand Energy

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Expand Energy Corporation
Company typePublic
IndustryPetroleum industry
PredecessorChesapeake Energy
Southwestern Energy
Founded1989; 35 years ago (1989)
Founders
HeadquartersOklahoma City, Oklahoma, U.S.
Key people
ProductsNatural gas
Production output
3,470 MMcf of natural gas per day (2023)
RevenueDecrease US$8.721 billion (2023)
3,780,000,000 United States dollar (2022) Edit this on Wikidata
Increase US$2.419 billion (2023)
Total assetsDecrease US$14.376 billion (2023)
Total equityIncrease US$10.729 billion (2023)
Number of employees
c. 1,000 (December 2023)
Websitewww.expandenergy.com
Footnotes / references
[1]

Expand Energy Corporation is a natural gas exploration and production company headquartered in Oklahoma City. It was previously known as Chesapeake Energy Corporation.

In 2023, the company produced 3,470 MMcf of natural gas per day.[1] As of December 31, 2023, the company had 9,688 Bcf of proved reserves.[1]

The company operates in the Appalachian Basin of the Marcellus Formation in Pennsylvania and West Virginia, as well as the Haynesville Shale in Northwestern Louisiana. The company also controls 2,518,519 net undeveloped acres in New Brunswick, Canada, which are subject to an indefinite moratorium on hydraulic fracturing due to public opposition and cannot be developed.

History

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Chesapeake Energy logo

The company was founded in 1989 as Chesapeake Energy by Aubrey McClendon and Tom L. Ward with an initial investment of $50,000. McClendon named the company after Chesapeake Bay due to his love of the region.[2] Ward left the company in 2006 to establish SandRidge Energy.

In 1993, the company became a public company via an initial public offering, with a valuation of $25 million.[3]

Focusing on a strategy of drilling horizontal natural gas wells in unconventional reservoirs, the company built a sizable position in the Golden Trend and Sholem Alechem fields of South-central Oklahoma and in the Giddings field of Southeast Texas.[4]

In the mid-1990s, the company unsuccessfully attempted to extend the Austin Chalk play into western and central Louisiana.[5]

In 1997, the company wrote down the value of its assets by over $200 million, approximately equal to shareholder's equity at the time, due to low commodity prices and implemented a turnaround plan.[6]

In the early 2000s, after a rise in natural gas prices made it economically feasible, the company focused on unconventional drilling in carbonates, tight sandstone, and shale particularly in the Barnett Shale, Fayetteville Shale, and the Marcellus Formation.[4]

In 2008, the company announced its discovery of the Haynesville Shale in East Texas and northwestern Louisiana.[7]

In 2009, the company partnered with Orange County Choppers to create the first chopper powered by compressed natural gas.[8]

In 2011, the company agreed to a 12-year naming rights partnership with the Oklahoma City Thunder for naming and branding rights of the Paycom Center at a cost of $3 million per year, with annual increases of 3%.[9] On April 20, 2021, the agreement was terminated.[10]

In June 2012, in response to shareholder concerns about corporate governance issues under McClendon's watch, the company appointed Archie W. Dunham as chairman, while Aubrey McClendon remained CEO.[11]

In December 2012, the company sold midstream assets for $2.16 billion.[12]

Effective April 1, 2013, Aubrey McClendon was forced to leave the company after revelations that he took a personal stake in wells owned by the company and then used those investments as collateral for up to $1.1 billion in loans from banks that also financed the company.[13][14] He was also accused of several conflicts of interest.[15][16][17][18] The U.S. Securities and Exchange Commission opened an informal inquiry of McClendon's borrowing practices.[19][20]

In May 2013, Robert Douglas Lawler, an executive of Anadarko Petroleum, was named CEO of the company.[21]

In 2013, the company sold 55,000 net acres in the Northern Eagle Ford Shale and 9,600 net acres in the Haynesville Shale to EXCO for aggregate proceeds of $1 billion.[22]

In December 2014, the company sold a large portion of its oil and gas assets in the Marcellus Formation and Utica Shale to Southwestern Energy for net proceeds of $4.975 billion. The transaction included approximately 413,000 net acres and 1,500 wells in northern West Virginia and southern Pennsylvania. Net production of the sold assets was 57,000 barrels of oil equivalent per day in December 2014.[23]

In 2014, the company also sold additional midstream assets for $520 million.[24]

In September 2015, the company announced layoffs of hundreds of people in Oklahoma City.[25]

On March 2, 2016, former CEO and co-founder Aubrey McClendon died in a single-occupant single-vehicle crash when he drove his vehicle directly into a concrete bridge embankment in Oklahoma City.[26][27] It occurred the day after a United States Department of Justice federal grand jury indicted McClendon for violating antitrust laws during his leadership at Chesapeake.[26]

In 2017, the company sold assets in the Haynesville shale for $465 million.[28]

In January 2018, the company laid off 400 employees.[29]

In the first quarter of 2018, the company sold assets in Oklahoma for $500 million.[30]

In February 2019, the company acquired Texas oil producer WildHorse Resource Development for $4 billion in cash and stock.[31]

In June 2020, the company filed for bankruptcy protection with $7 billion in debt.[32][33] It emerged from bankruptcy protection in February 2021.[34][35][36][37]

In April 2021, Doug Lawler resigned as CEO of the company and Mike Wichterich, Chair of the Board of Directors, was named interim-CEO.[38]

In November 2021, the company acquired Vine Energy, which operated in the Haynesville Shale.[39][40]

In March 2022, the company acquired Chief Oil & Gas for approximately $2.6 billion.[41][42]

In May 2023, the company sold a portion of its oil and gas assets in the Eagle Ford shale for US$1.4 billion, to Ineos.[43]

In October 2024, the company acquired Southwestern Energy in a $7.4 billion all-stock deal and was rebranded as Expand Energy.[44][45] Southwestern Energy traced its roots to Arkansas Western Gas Company, which was established in July 1929 as a subsidiary of Southern Union Gas Company of Dallas.

Controversies

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Antitrust allegations

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Alleged collusion with Encana to lower land price

[edit]

In mid-2012, the U.S. Department of Justice (DOJ) began an investigation into whether Encana, Canada's largest natural gas company, "illegally colluded with Chesapeake Energy Corp to lower the price of Michigan exploration lands during a public land auction in May 2010." The antitrust probe ended in 2014 with a letter to Chesapeake by the U.S. Department of Justice. Internal investigations by the companies found no evidence of collusion.[46][47]

Cancellation of leases

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On June 5, 2014, the state of Michigan filed felony fraud and racketeering charges against the company, alleging that the company canceled hundreds of land leases on false pretenses after it sought to obtain oil and gas rights.[48] Michigan attorney general Bill Schuette claimed that the company "obtained uncompensated land options from these landowners by false pretenses, and prevented competitors from leasing the land." Chesapeake Energy disputed all charges.[49] In 2015, the company settled the lawsuits by agreeing to pay $25 million to the landowners.[14]

Underpayment of royalties to landowners

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The company has faced thousands of lawsuits regarding the alleged under-payment of royalties due to individuals that leased land to the company.[50] In 2013, the company agreed to pay $7.5 million to settle a class action lawsuit by Pennsylvania landowners.[51] In 2017, the company agreed to pay another $30 million to Pennsylvania landowners.[52]

Alleged collusion in land auctions

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On March 1, 2016, a DOJ federal grand jury indicted Aubrey McClendon for allegedly rigging the bidding process for land leases between December 2007 and March 2012.[14] McClendon was charged of orchestrating a conspiracy in which two oil and gas companies, not named in the indictment, colluded not to bid against each other for the purchase of land in northwestern Oklahoma.[26] According to the indictment, the companies decided ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company, eliminating open competitive bidding.[53] The DOJ said this was the first case resulting from a continuing federal antitrust investigation into price fixing, bid rigging, and other anti-competitive conduct in the petroleum industry.

The next day, on March 2, 2016, McClendon died in a single-occupant single-vehicle crash when he drove his vehicle straight into a concrete bridge embankment.[26] The charges were dropped by the DOJ as a result of the death.[54]

Alleged price-fixing

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In January 2024, a class action lawsuit was filed accusing the company, along with seven other US oil and gas producers, of engaging in an anti-competitive business practice in the form of an illegal price fixing scheme to constrain production of shale oil, allegedly leading to drivers in the US paying more for gasoline than they would have in a competitive market.[55]

Lobbying

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In 2004, then CEO Aubrey McClendon contributed $450,000 to the campaign of Tom Corbett for attorney general of Pennsylvania. These funds were cited as the reason Corbett won the election, with a narrow margin. When Corbett eventually became governor of Pennsylvania, he was very supportive of the company's fracking activity in Pennsylvania, and Pennsylvania was the only state without a severance tax on drillers, despite the fact that the budget for education was being reduced.[56]

In 2008, then CEO Aubrey McClendon formed American Clean Skies Foundation, a non-profit foundation focused on selling the virtues of natural gas. The foundation was funded by the company and by McClendon. The foundation was criticized for doing nothing but pushing Congress to pass policies that benefited the company and McClendon's business interests.[57]

Environmental damage

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Discharges of fill material

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In 2013, the Environmental Protection Agency fined a subsidiary of the company $3.2 million, and ordered it to pay an estimated $6.5 million for the restoration of sites that were damaged by the company from unauthorized discharge of material.[58]

2011 well blowout

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On April 19, 2011, due to a failed seal assembly in a wellhead, the company lost control of a natural gas well in Bradford County, Pennsylvania that was being fracture stimulated, causing a large spill of salt water and chemicals, such as 2-butoxyethanol and methanol, into the surrounding countryside.[59][60][61] By April 22, 2011, the leak had been stemmed.[62] Maryland announced its intention to sue the company for violation of the Resource Conservation and Recovery Act and the Clean Water Act since fracking fluids from the well blowout wound up in the Chesapeake Bay.[63]

2015 landslide

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In November 2015, the company was fined $1.4 million in Pennsylvania for a landslide caused by the company in 2011 that resulted in clogged waterways.[64][65]

Earthquakes Oklahoma and Kansas correlated with hydraulic fracturing

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In 2007, Oklahoma recorded a single earthquake. By 2015, after the rise in hydraulic fracturing, there were more than 900.[66] After the 2011 Oklahoma earthquake in Prague, Oklahoma, having suffered home damage and physical injury, a resident sued the company.[67] The Sierra Club also filed a lawsuit against the company and Devon Energy over damages suffered in a magnitude 5.8, 2016 Oklahoma earthquake near Pawnee, which was tied for the largest such shock in the eastern United States in 70 years.[68][69] A judge dismissed the lawsuit in April 2017.[70]

Public opposition to hydraulic fracturing in New Brunswick, Canada

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See also: Shale gas in Canada

In 2003, shale gas was discovered in New Brunswick, Canada. The company received exclusive licenses from the Department of Energy and Resource Development to conduct an exploration program. However, after protests by local citizens, in 2015, the provincial government in New Brunswick imposed a moratorium on hydraulic fracturing, and in May 2016, the government announced that the moratorium would continue indefinitely.[71][72][73][74][75][76]

Awards and recognition

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In 2007, the company was named the best managed oil-and-gas company by Forbes.[77]

In 2009, S&P Global Platts named the company as the Energy Producer of the Year and it received the Industry Leadership Award. The company was also a finalist in the Deal of the Year, CEO of the Year, and Community Development Program of the Year categories.[78] In 2012, the company received an Award of Excellence.[79]

In 2010, Shaleplay, the company's corporate band, won first place in the Fortune Battle of the Corporate Bands.[80]

In 2014, the company was ranked 51st on the 100 Best Companies to Work by Fortune.[81]

In 2021, the company achieved Grade "A" MiQ and EO100 Certification for its legacy Haynesville Shale operations.[82]

See also

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References

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  1. ^ a b c "Chesapeake Energy 2023 Form 10-K Annual Report". U.S. Securities and Exchange Commission. February 21, 2024.
  2. ^ "Chesapeake Energy sells assets in $2bn deal". Petro Online. December 13, 2012.
  3. ^ Goodell, Jeff (March 1, 2012). "The Big Fracking Bubble: The Scam Behind the Gas Boom". Rolling Stone. Archived from the original on April 27, 2018.
  4. ^ a b Li, Xiaobing; Molina, Michael (October 14, 2014). Oil: A Cultural and Geographic Encyclopedia of Black Gold, Volume 1. ABC-CLIO. p. 40. ISBN 9781610692724.
  5. ^ "Chesapeake presses Louisiana Austin chalk pace". Oil & Gas Journal. August 12, 1996.
  6. ^ "MOODY'S CONFIRMS SR. NOTES OF CHESAPEAKE ENERGY AT Ba3". Moody's Corporation. December 8, 1997.
  7. ^ Spencer, Starr (March 22, 2013). "On its fifth anniversary, the Haynesville Shale is still alive but natural gas output is sputtering". S&P Global Platts.
  8. ^ Zizzo, David (June 17, 2009). "Chesapeake CNG Chopper born to be wildly efficient". The Oklahoman.
  9. ^ "OKC Arena to be Renamed Chesapeake Energy Arena" (Press release). National Basketball Association. July 22, 2011.
  10. ^ "Chesapeake Energy terminates naming rights deal with Thunder". Associated Press. April 20, 2021.
  11. ^ Pulsinelli, Olivia (June 21, 2012). "Chesapeake names Archie Dunham chairman, appoints four to board". American City Business Journals.
  12. ^ "Chesapeake in $2 billion midstream deal". Reuters. December 11, 2012.
  13. ^ "Chesapeake Energy Corporation Announces CEO Succession Plan" (Press release). Business Wire. January 29, 2013.
  14. ^ a b c Krauss, Clifford (March 1, 2016). "Aubrey McClendon, Ex-Head of Chesapeake Energy, Is Charged With Conspiracy". The New York Times.
  15. ^ "The Greek tragedy of the billionaire who fracked up Pa". Philadelphia Media Network. March 3, 2016.
  16. ^ Shiffman, John; Driver, Anna; Grow, Brian (June 7, 2012). "The lavish and leveraged life of Aubrey McClendon". Reuters.
  17. ^ Lustgarten, Abrahm (March 13, 2014). "Chesapeake Energy's $5 Billion Shuffle". ProPublica.
  18. ^ "Chesapeake Energy Corporation's Board and CEO Aubrey K. McClendon Agree to Negotiate Early Termination of Founder Well Participation Program" (Press release). Business Wire. April 26, 2012.
  19. ^ "Trouble With the Top Man". The New York Times. April 26, 2012.
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  21. ^ Driver, Anna (May 20, 2013). "Chesapeake Energy hires Anadarko executive as CEO". Reuters.
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  23. ^ "Chesapeake Energy Corporation Closes Southern Marcellus and Utica Shale Sale; Announces $1 billion Common Stock Repurchase Authorization" (Press release). Business Wire. December 22, 2014.
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  27. ^ GEEWAX, MARILYN; Domonoske, Camila (March 2, 2016). "One Day After Indictment, Former Chesapeake Energy CEO Dies In Car Crash". NPR.
  28. ^ "Chesapeake Energy Corporation Announces Agreement To Sell Second Haynesville Shale Acreage Position For $465 Million" (Press release). PR Newswire. December 20, 2016.
  29. ^ Wilmoth, Adam (January 30, 2018). "Chesapeake Energy lays off 400 employees". The Oklahoman.
  30. ^ Wilmoth, Adam (February 7, 2018). "Chesapeake Energy to sell Oklahoma assets for $500 million". The Oklahoman.
  31. ^ Chapa, Sergio (February 1, 2019). "Chesapeake, WildHorse complete $3.98 billion M&A deal". Houston Chronicle.
  32. ^ French, David; Venkat, Rama (June 28, 2020). "Shale pioneer Chesapeake Energy files for bankruptcy". Reuters. Archived from the original on June 29, 2020.
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  39. ^ "Chesapeake Energy Corporation Completes Acquisition Of Vine Energy Inc" (Press release). PR Newswire. November 1, 2021.
  40. ^ "Chesapeake completes Vine acquisition". The Journal Record. November 2, 2021.
  41. ^ "CHESAPEAKE ENERGY CORPORATION COMPLETES ACQUISITION OF CHIEF E&D HOLDINGS, LP AND AFFILIATES OF TUG HILL, INC" (Press release). PR Newswire. March 9, 2022.
  42. ^ "Chesapeake Energy Completes Acquisition of Chief, Tug Hill Affiliates". Hart Energy. March 9, 2022.
  43. ^ "INEOS completes major $1.4 billion acquisition of US onshore oil and gas assets" (Press release). Ineos. May 3, 2023.
  44. ^ Pulsinelli, Olivia (October 2, 2024). "Expand Energy begins trading after Chesapeake closes acquisition of Southwestern Energy". American City Business Journals.
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  51. ^ CUSICK, MARIE (September 3, 2013). "Chesapeake Energy Agrees To Pay $7.5 Million To Settle Royalty Lawsuit". NPR.
  52. ^ MAYKUTH, ANDREW (December 26, 2017). "Chesapeake Energy agrees to pay $30M to settle shale royalty dispute, but there's a snag". Lebanon Daily News. Pittsburgh Post-Gazette.
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  55. ^ Scarcella, Mike (January 16, 2024). "Drivers sue US shale oil producers over alleged price-fixing scheme". Reuters. Archived from the original on 2024-01-21.
  56. ^ "PA Gov. Corbett Slashes Education and Health Care, Refuses To Tax Natural Gas Drilling". Think Progress. July 2, 2011.
  57. ^ Cappiello, Dina (April 24, 2008). "Aubrey McClendon's energy 'education' campaign". E&E News.
  58. ^ "Energy Company to Pay $3.2 Million Penalty to Resolve Clean Water Violations in West Virginia" (Press release). United States Department of Justice. December 19, 2013.
  59. ^ Soraghan, Mike (May 4, 2011). "Pa. Well Blowout Tests Natural Gas Industry on Voluntary Fracking Disclosure". The New York Times.
  60. ^ Kusnetz, Nicholas (April 26, 2011). "Response to Pa. Gas Well Accident Took 13 Hours Despite State Plan for Quick Action". ProPublica.
  61. ^ "ATGAS Initial Site Characterization Report" (PDF). SAIC Energy. August 30, 2011.
  62. ^ McAllister, Edward (April 22, 2011). "Chesapeake stems flow from blown Pennsylvania gas well". Reuters.
  63. ^ Warner, Dave (May 4, 2011). "Maryland prepares lawsuit over PA gas drilling effect on water". Reuters.
  64. ^ Monies, Paul (November 24, 2015). "Chesapeake unit to pay $1.4 million fine in Pennsylvania". The Oklahoman.
  65. ^ "Chesapeake Energy 2015 Form 10-K Annual Report" (PDF). secdatabase.com. February 25, 2016.
  66. ^ Sanburn, Josh (March 10, 2016). "Greed, Politics and the Biggest Oil Boom in Decades". Time.
  67. ^ "Energy's New Legal Threat: Earthquake Suits". The Wall Street Journal. March 30, 2015.
  68. ^ Wertz, Joe (February 16, 2016). "Sierra Club Files Federal Lawsuit Against Three Energy Companies Over Earthquakes in Oklahoma and Kansas". NPR.
  69. ^ O'Donnell, Paul (February 17, 2016). "Days after Oklahoma earthquake, Sierra Club lawsuit targets Chesapeake, Devon, others". The Dallas Morning News.
  70. ^ Wertz, Joe (April 5, 2017). "Judge Dismisses Sierra Club Lawsuit Against Oil Companies Over Oklahoma Quakes". NPR.
  71. ^ "Fracking firm says vandals won't stop it". CBC News. July 26, 2011.
  72. ^ "Seismic testing trucks blocked by protesters". CBC News. August 10, 2011.
  73. ^ "IN DEPTH: N.B. shale gas industry". CBC News. November 26, 2011.
  74. ^ "Sussex mayor warns shale gas ban is not the answer". CBC News. December 2, 2011.
  75. ^ "Anti-shale gas protest closes Highway 11 in N.B. for hours". CBC News. November 29, 2013.
  76. ^ "RCMP, protesters withdraw after shale gas clash in Rexton". CBC News. October 17, 2013.
  77. ^ Wethe, David; Carroll, Joe (June 12, 2020). "Chesapeake's demise marks end of shale model that changed the world". Financial Post. Bloomberg News.
  78. ^ "Congratulations 2009 Winners". S&P Global Platts. 2010.
  79. ^ "Platts 2012 Global Energy Awards--Winners". S&P Global Platts.
  80. ^ "CHESAPEAKE ENERGY CORPORATION'S CORPORATE BAND WINS FIRST PLACE IN FORTUNE BATTLE OF THE CORPORATE BANDS" (Press release). U.S. Securities and Exchange Commission. October 5, 2010.
  81. ^ "Best Companies to Work For 2014". Fortune.
  82. ^ "CHESAPEAKE ENERGY CORPORATION ACHIEVES GRADE "A" MiQ AND EO100™ CERTIFICATION FOR ITS LEGACY HAYNESVILLE SHALE OPERATIONS" (Press release). PR Newswire. December 21, 2021.
[edit]
  • Official website
  • Business data for Expand Energy:
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