Southwestern Energy Co. (NYSE:SWN) and Chesapeake Energy Corp. (NASDAQ:CHK) are reportedly on the verge of a merger, creating a $17 billion entity. The outcome of this merger could result in one of the nation’s largest natural gas producers.
What Happened: The merger between these two energy powerhouses is expected to be finalized as early as next week, according to a report by The Wall Street Journal.
The combined valuation of the new entity is estimated to be around $17 billion, considering Southwestern’s market capitalization at approximately $7.6 billion and Chesapeake’s at $10.3 billion.
The announcement of the potential merger saw Southwestern’s stock rise by over 7%, while Chesapeake’s shares gained over 2%, on Friday.
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Occidental Petroleum announced the acquisition of CrownRock for nearly $12 billion in December 2023.
Why It Matters: The Southwestern-Chesapeake merger news comes in the backdrop of the latter filing for bankruptcy in 2020. During this process, it shed over $7 billion in debt and hived off oil assets in Texas, sharpening its focus on natural gas instead.
If the merger goes through, the merged entity could become the largest gas producer in the U.S. Chesapeake reported production of 3.4 billion cubic feet of natural gas in the September 2023 quarter, while Southwestern reported production of 4 billion cubic feet.
On the other hand, EQT Corp. (NYSE:EQT) reported production of 7 billion cubic feet of natural gas during this period.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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