Chesapeake Energy Corporation CHK has announced that the pending merger with Southwestern Energy SWN is anticipated to close early in the fourth quarter of this year. Chesapeake Energy had announced the acquisition of rival natural gas firm Southwestern Energy in an all-stock deal, in January 2024. The deal was valued at approximately $7 billion.
The acquisition was originally anticipated to be closed by the end of the second quarter. However, the U.S. Federal Trade Commission’s (FTC) request for additional information on the transaction postponed the deal.

Chesapeake Energy CEO Dell’Osso commented on the current state of the U.S. natural gas market, mentioning that it is oversupplied at present. In this situation, he believes that the company should be cautious about its overall supply strategy. The post-merger company will adjust the supply as and when the management believes that the oversupply issue has been resolved.
A situation of oversupply in the market is believed to negatively impact prices. Natural gas prices made a massive plunge earlier this year. As a result, several gas producers in the United States are cutting back on production.
Dell’Osso has highlighted that Chesapeake Energy’s current gas production is about 3 billion cubic feet per day, which may increase to 7 billion cubic feet per day following the closure of the deal.

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