Southwestern, Chesapeake Energy close to merger, creating $17 billion U.S. natural gas company

(Bloomberg) – Southwestern Energy Co., and Chesapeake Energy Corp. are close to a merger that would create a roughly $17 billion company, ranking as one of the largest natural gas producers in the U.S., the Wall Street Journal reported.

A deal could come together as soon as next week, the newspaper said, citing people familiar with the situation. Buying Southwestern would solidify Chesapeake’s focus on natural gas. It would also put the company in a better position to capitalize on global demand for liquefied natural gas shipments from the U.S. Gulf Coast.

The acquisition would make Chesapeake’s gas production larger than its biggest rival, EQT Corp., and expand its holdings in two key gas drilling regions: the Marcellus basin in Appalachia and the Haynesville basin in Louisiana and East Texas. The potential merger comes as U.S. oil and gas producers are increasingly buying up competitors as they push cut costs and increase future production.

Updated to include an external link to the official merger announcement, made on Jan. 11, 2024.