Chesapeake Energy moves ahead with shareholders meeting but not a vote on its merger


Awaiting Federal Trade Commission review of its proposed more than $7 billion merger with Southwestern Energy, Oklahoma City’s Chesapeake Energy is moving ahead with its annual shareholders meeting.

However, shareholders at their Thursday, June 6, 10 a.m. central time virtual meeting will not be asked to vote on the proposed merger which is an all-stock transaction estimated to be worth $7.4 billion.

Instead, those who hold the 131,048,149 shares of common stock in Chesapeake Energy will be asked to approve the election of 7 directors, approval executive officer’s compensation or “say on pay”, approve an extension of an amended Long Term Incentive Plan and ratification of the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2024, according to a proxy statement filed this week with the Securities and Exchange Commission.

The proposed list of directors includes Domenic Dell’Osso Jr., Timothy Duncan, Benjamin Duster IV, Sarah Emerson, Matthew Gallagher, Brian Steck and Michael Wichterich.

Dell’Osso Jr. is Chesapeake’s President and Chief Executive Officer while Wichterich is Chairman of the Board.

The proposed merger with Houston’s Southwestern Energy would create one of the largest natural gas operators in the U.S. In a message and what appeared to be a sales effort to shareholders, Dell’Osso and Wichterich cautioned how the natural gas market remains oversupplied and natural gas storage levels are 40% above their five-year averages.

Still, the two leaders maintained “Chesapeake was built for this moment.” They say the market dynamics resulted in cyclical lows for natural gas prices, but demand is expected to rise materially over the next several years.

“Our pending merger with Southwestern Energy will create a substantial opportunity to respond to evolving market dynamics and help connect crucial natural gas resources to consumers in need.”

They told investors the company is coming into the merger “from a position of strength.” Further, they pointed to Chesapeake’s 2023 results in its two targeted core assets, the Marcellus and Haynesville plays. In the Marcellus, Chesapeake drilled 9 of the 10 longest laterals in company history and improved well costs by 17%. In the Haynesville, the company said it outpaced peers in what it called the most difficult drilling environment in the lower 48 states.

Over the past year and before the announced merger with Southwestern Energy, Chesapeake Energy divested its holdings in the south Texas Eagle Ford play and devoted more efforts in the Haynesville and Marcellus plays.