Chesapeake Energy announces merger with Southwestern Energy; new company to HQ in Oklahoma City
Oklahoma City-based Chesapeake Energy announced Thursday it will merge with Houston's Southwestern Energy Company.
The $7.4 billion transaction will create the largest natural gas producer in the United States. The combined company will operate under a new name after the deal is closed, according to a press release from Chesapeake.
Nick Dell'Osso, the current President and CEO of Chesapeake, will retain that role with the combined company, which will be headquartered in Oklahoma City. The company will also maintain its Houston offices.
"This powerful combination redefines the natural gas producer, forming the first U.S. based independent that can truly compete on an international scale. The union creates a deep inventory of advantaged assets adjacent to high demand markets, allowing for the application of proven operational practices and the power of an Investment Grade quality balance sheet to drive significant synergies benefiting energy consumers and shareholders alike," Dell'Osso said in a press release.
"The world is short energy and demand for our products is growing, both in the U.S. and overseas. We will be positioned to deliver more natural gas at a lower cost, accelerating America's energy reach and fueling a more affordable, reliable, and lower carbon future. I look forward to leading the talented workforce of the combined organization to accelerate the long-term value opportunity for our shareholders, employees, and all stakeholders."
What to know about the Chesapeake-Southwestern merger
According to the press release, Chesapeake shareholders will own approximately 60% and Southwestern shareholders will own approximately 40% of the combined company.
The combined company expects an approximate 20% improvement in dividends per share over five years through Chesapeake’s existing shareholder return framework.
The company will build a global marketing and trading presence in Houston to supply lower cost, lower carbon energy, according to the release.
By combining acreage, the combined company has over 5,000 gross locations and 15 years of inventory.
It will have 11 members on its board of directors comprised of seven representatives from Chesapeake and four representatives from Southwesters, according to the release.
The transaction is targeted to close in the second quarter of 2024.
This is a developing story and will be updated.
More: What would a Chesapeake Energy merger mean for massive OKC campus?
This article originally appeared on Oklahoman: Chesapeake Southwestern merger confirmed, will be biggest gas producer
