Chesapeake Not Winning Many Over in the Marcellus Shale Region

Chesapeake Energy, the once hard chargingshale gas company who took the Pennsylvania Marcellus by storm back in 2009, is losing its hold as the market leader within the state. New state production reports out this week show Chesapeake does not own any of the top producing 25 wells in Pennsylvania. All 25 of the best wells are now owned by either Cabot Oil & Gas Corporation (COG), who owns eight of the top ten wells, or private Citrus Energy. State records further show after drilling an average of 235 wells each year for 2010 and 2011, Chesapeake has drilled just 64 wells in Pennsylvania so far this year.
While the company blames its recent actions on what it calls the low price for natural gas, it remains deep in debt as it struggles to sell off an estimated $9 billion in critical shale gas assets in order to meet its immediate debt obligations. It faces several federal investigations including one by the U.S. Department of Justice for allegations of price fixing in Michigan while increasingly besieged with landowner lawsuit claims of underpayment of gas royalties and related leasehold disputes.
Even as the company decreases drilling operations within the state, last week controversy arose when, according to state officials, it filed an error filled production report with the Pennsylvania Department of Environmental Protection. This caused great confusion within the state regarding actual production and has called into question oversights as to how accurate such production data might be. Such recent reversals and missteps are now combining to make the company a shadow of itself in Pennsylvania even as it tries to assure state landowners all is well. The same Pennsylvanians who just a few short years ago were told by Chesapeake Energy Pennsylvania was a key part of its self-proclaimed, ‘Shale Gas Revolution’.
Read the rest of the article here.

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