There’s a big reason why Oklahoma City’s Chesapeake Energy pulled off the pending $7.4 billion merger with Southwestern Energy company of Houston earlier this year. It will allow the firm to drill even more in some of the most prolific natural gas regions in the country.
The move will allow Chesapeake to invest even deeper into one of the most productive natural gas plays in the U.S.—the Haynesville. The other is the Appalachia play.
Consider this. Together with the Appalachia, where Southwestern was also active, natural gas production accounted for 46% of all U.S. marketed natural gas production in 2023 but less than 2% of U.S. crude oil production in 2023.
The figure came this week from the U.S. Energy Information Administration. The EIA also forecast that in 2025 the Appalachia and Haynesville regions will continue to be large sources of natural gas.
“We expect the Haynesville region to account for 14% of the U.S. marketed natural gas production in 2025 because the region is close to infrastructure connecting natural gas supply to growing liquefied natural gas export facilities,” stated the EIA.
It pointed out that the Appalachia region has been the source of almost a third of the marketed natural gas production for over a decade, and “we expect the trend to continue in 2025.”
The Eagle Ford and Bakken combined was the source of 19% of U.S. crude oil production in 2023 and 9% of marketed natural gas production in 2023.
The merger of Chesapeake Energy and Southwestern Energy won recent approval of shareholders in each company. However, it still must be approved by the Federal Trade Commission. In April, the firms announced the closing date of the merger was pushed back to the second half of the year after the FTC requested more details of the deal.
Chesapeake had originally anticipated the closing would be accomplished by the second quarter of the year. But under the Biden administration, some lawmakers pushed for increased scrutiny by the commission over multi-billion dodllar deals. As Reuters reported, nearly 50 Democdrats in Congress urged the FTC in March to investigate oil and gas company deals and expand current investigations.