Oil and Natural Gas Corporation possibly in talks to acquire Chesapeake Energy


http://energyplugged.com/2015/01/20/oil-and-natural-gas-corporation...

Oil and Natural Gas Corporation possibly in talks to acquire Chesapeake Energy


Natural gas prices in Asia are currently three to four times higher than those in the US. Integration of US and Asian natural gas markets, particularly Indian market could mean huge cost savings for ONGC. While currently some regulatory issues exist, Indian Prime Minister Narendra Modi and President Barack Obama will meet in New Delhi on January 25 to discuss the possible options, with both being keen on solving the issues. Outcome of the talks could be the start of the biggest US-Asia gas collaboration in decades.

Recent low energy prices are helpful to India, who has been and will remain a net energy importer. As energy prices could rise in the future, India has to make some acquisitions to hedge themselves against higher energy prices in the future. Indian government has directed ONGC to seek such opportunities agressively, as they have their war chest intact.

Chesapeake Energy is a strong strategic target, given its recent sales and great balance sheet and diversification through two commodities, a good strategy in the given energy environment. The new management has improved the situation a lot – cut administrative expenses and capital spending, as well as de-leveraged through asset sales. Combined with improved cash flow and shale positioning, it’s a very attractive option for ONGC.

Jefferson Research mentioned last week, that Chesapeake’s balance sheet has taken a hit recently, given the rising liquidity issues. Operating efficiency has also a lot of room for improvement. Indian oil companies have had limited success so far when targeting overseas oil and gas assets, often being outbid by their Chinese counterparts. However, Chesapeake’s current position under the new management suits ONGC a lot better, given attractive returns accretion and reasonable free cash profile.

Taking into account the favorable polititcal and market conditions for cash rich national Exploration and Production companies, India`s Oil and Natural Gas Corporation could be already in talks with a North-American gas and oil company, with Chesapeake Energy is believed to be the target, according to industry experts.


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Hopefully India's Oil and Natural Gas Corporation (ONGC) will take their time and conduct their due diligence with their eyes wide open.

One wonders what impact such an acquisition would have on CHK royalty owners . . . if any.

When you call the royalty owner's support line a guy in India answers the phone?  So it'd be like every other major American company in that regard.

"When you call the royalty owner's support line a guy in India answers the phone? So it'd be like every other major American company in that regard."

D.G.

So might be different in the sense Someone answers the phone. Ha Ha

The above article left out some important information on how CHK is making their fortune in Ohio. Add the below sentences to this portion of the article and you will have a clearer picture of Ohio's Shale O&G future, under India, China, France or whatever country buys CHK.

"Chesapeake Energy is a strong strategic target, given its recent sales and great balance sheet and diversification through two commodities, a good strategy in the given energy environment. The new management has improved the situation a lot – cut administrative expenses and capital spending, as well as de-leveraged through asset sales."

Add The Following:

Cut landowners down to $57 to $150 per acre regardless of volume of products taken, implemented a laundry list of deductions on Gross No Deduction Leases, and have yet to pay for NGLs at Buck Well 1H, 6H, soon to be implemented for wells Coming Soon Near You.

I'd say CHK is a steal, for an international company and to Ohio Landowners.  Let me know when the rest of you start getting your rationed royalties. Until then see you in the Funny Papers.

I am interested in how my particular situation will play out.

I will be drilled in a Chesapeake unit under a lease held by Antero.

I assume that Chesapeake will pay Antero for my portion of production and then a boot for Antero, I am hoping that Antero will provide me some protection.

Have you considered joining your neighbors in a group of some sort and hiring an attorney ?

David: Don't hope for too much help from Antero. In my case I am leased by Enervest but part of my property is in a Chesapeake unit. For that unit, I have to deal directly with CHK just as if the lease was with them. Enervest washed their hands entirely of anything to do with that unit. Good luck with Antero. It seems there are all sorts of agreements that the companies can make with each other. Maybe the arms length treatment is so the bad reputation of a business partner doesn't taint their image.

You are in a unit being drilled by CHK.. nuff said. I feel for ya ,man.Even if you signed with Antero. Don't count your chickens just yet!

I am thinking now that I will hire an attorney like the Krugliak/Wilkins folks to check each payment of royalties, I would rather pay them than be ripped off.

I am interested in a landowners group of the unit our property is in, maybe we could all go together and hire those folks to insure that we get what we are supposed to get.

I have an additional thought on this:

CHK is currently an American company, OK based I think.  But it's American.  So in terms of politics, when we go against them it's American vs. American.  There's not a lot of help in that.

Now if a foreign entity buys out CHK and if they continue to pull the same despicable stuff that's always been CHK's bread and butter, then politically we as landowners are in a stronger position.  This is because it will become us home-grown apple pie Americans against the foreign devils.  That should help us in the courts.  

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