Comstock in talks to buy Chesapeake's Haynesville assets - Reuters
The companies have settled on a structure for the deal and hope to reach an agreement by the end of the year, according to the report.
CHK has been reducing its activity in the Haynesville region and said last week it was releasing its rigs and completion crews for the rest of the year.
CRK became the largest operator in Haynesville after buying privately held Covey Park in a $1.1B deal in June.
Yes on the future plants - and JJ has the connections, gravitas and $$$$$$$$$$$$$ to be involved with long term contracts for these facilities.
The second wave of planned LNG export facilities are not coming on line as expected. There are a few additional "trains" being added at existing facilities but demand is not out stripping supply fast enough and prices are stagnating. The problem is that new demand keeps getting overrun by increased supply. See this Main Page discussion.
Tellurian is not on the list. FID was expected in spring, now by the end of the year. Could begin construction next year.
Cowboys owner Jerry Jones has a long-term game plan for Haynesville gas
November 15, 2019
(Reuters) - At a time when companies in a U.S. natural gas field have been losing money and exiting Louisiana’s Haynesville shale basin, Dallas Cowboys’ owner Jerry Jones’ Comstock Resources (CRK.N) is picking up cheap assets, betting on the field’s proximity to the growing U.S. Gulf Coast export hub.
Reuters on Wednesday reported that Comstock Resources (CRK.N) is in talks to buy Chesapeake Energy Corp’s (CHK.N) Haynesville shale assets in Louisiana. A deal would come just months after Comstock paid $1.1 billion to buy privately held Covey Park Energy to become the largest operator in the region.
The U.S. shale boom has helped turn the country into the world’s third-largest exporter of liquefied natural gas (LNG), and it is on track to become the top exporter within five years. But persistent low prices have left a number of major companies, including Chesapeake, in dire financial straits due to oversupply, while others have sold their stakes. Comstock is making the opposite bet.
By boosting its presence in the region, Comstock is making a bet on a rapid growth of the LNG market, with global demand expected to rise 26% by 2024, abundant export infrastructure at its doorstep, and ability to push down costs as it gains clout. The region also has access to the other big drivers of U.S. gas demand: Gulf Coast petrochemical facilities and pipelines into Mexico.
Jones, who has sunk more than $1.1 billion in Comstock so far, could not be reached for comment, but in June, after the Covey deal, he said that he believed the Haynesville assets to be “the very best hydrocarbon assets.”
A supply glut has pushed gas prices below $3 per million British thermal units and forced producers to turn much of the surplus into liquefied natural gas (LNG) for export to Asia and Europe, where demand for the fuel has been rising.
The United States became the world’s third largest LNG exporter this year and in July exported 5.2 billion cubic feet per day, according to government data. The country is on track to become the world’s top LNG exporter by 2024, according to the International Energy Agency.
“It’s pretty clear he’s long natural gas. He’s made his bet on the Haynesville,” Nick Volkmer, vice president at RS Energy Group, said about Jones. Most of Haynesville’s output would ultimately be taken by LNG export plants along the U.S. Gulf Coast, Volkmer said.
The Frisco, Texas-based company plans to focus almost all of its capital expenditure in the region next year, saying it “continues to generate economic returns even in the low natural gas price environment that we live in today.”
Chesapeake previously sold some of its Haynesville shale acreage in 2017 to Covey Park Energy. Other companies exiting the field include QEP Resources, which sold its Haynesville assets in a deal with Aethon energy that closed in January.
“It’s kind of a big board game now, and you got to have some size,” Comstock Chief Executive Officer Jay Allison said in an earnings call last week, adding that the company would look to consolidate in the Haynesville and sell some of its non-core properties.
Comstock did not respond to requests for comment.
Jones has repeatedly stated that he ultimately hopes to sell Comstock to a larger integrated major, an exporter, or a utility, a person familiar with his plans said.
Guess this author has been following our discussion! LOL
Is there any information of potential LNG customers building LNG gasification plants? Is that the proper term? Also, there would be the supporting pipeline construction to distribute the gas.
Re-gasification would be the term. I don't see much on that or floating LNG but I do recall some past articles on oil majors/super-majors offering financing for countries to build re-gasification facilities and distribution systems.
For many third world countries it is a question between the cost of the infrastructure required to use LNG and that of solar+storage. Where solar works well, micro-grids may be the less expensive investment. And a better match for undeveloped countries.
I am sure that there is somewhere but I wouldn't know where to start. US LNG plans can probably be found in the public record / historical news items.
International projects tied to receiving LNG is another story - harder to track.
Realize too that the US LNG product is competing with multiple MAJOR LNG sources around the world (e.g. Qatar, SE Africa, etc.). And new discoveries in the eastern Mediterranean (Israel / Egypt) and NW Africa (Mauritania) will be adding more and more LNG potential to the market over time.