SandRidge Energy Inc. CEO Tom Ward on Thursday again stated his belief that the Mississippian Lime formation in northwest Oklahoma and western Kansas likely will be the next great American oil field.
Speaking on CNBC, Ward compared the area to the Bakken of North Dakota and Montana, where production companies led by Oklahoma City-based Continental Resources Inc. have doubled the size of the country’s oil reserves.
“We’re anticipating that peak production in the Mississippian Lime play will be around 500,000 barrels of oil (per day) before 2020,” Ward said.
SandRidge is the largest player in the Mississippian, followed by fellow Oklahoma City firms Chesapeake Energy Corp. and Devon Energy Corp.
As part of its continuing effort to sell assets and raise cash, Chesapeake Energy Corp. has put on the market more than 57,000 net acres of leasehold in the oil-rich Woodbine in East Texas.
The oil-rich leases are for a rock layer beneath the Eagle Ford shale and above the Buda Limestone formation.
The assets for sale include four 90 percent-operated Woodbine wells, five 100 percent-operated vertical Subclarksville and Bossier wells and one non-operated Subclarksville vertical well, according to a prospectus posted on the website of Meagher Energy Advisors, which is helping Chesapeake with the sale.
Meagher Energy Advisors also is working with Chesapeake on its sale of 500,000 net acres in Wyoming and Colorado.
Chesapeake has said it plans to sell $9.5 billion to $11 billion by the end of the year as part of its plan to pay down debt and fund its increasing oil and natural gas liquids production.
Chesapeake has said it plans to sell off noncore assets it defines as areas where it is not either the No. 1 or No. 2 leaseholder. The Woodbine leasehold is part of the non-core assets Chesapeake has said it plans to sell.
Chesapeake Energy Corp. shareholders hoping to get more information from the company before its scheduled annual meeting are running out of time to delay the proceeding.
A hearing on their request to postpone the June 8 meeting had been set for Wednesday afternoon, but it has been continued until next week.
Attorneys said U.S. District Judge Vicki Miles-LaGrange cited personal reasons for moving the hearing. She now is scheduled to hear arguments at 10 a.m. Tuesday.
Chesapeake has argued against postponing the meeting, contending the company has provided sufficient information to its shareholders.
Chesapeake shareholders will vote on compensation and governance issues and the re-election of two board members at the annual meeting.
Several institutional investors have called on shareholders to withhold votes for board members Burns Hargis and Richard K. Davidson. The latest was New York State Comptroller Thomas P. DiNapoli, who Tuesday urged shareholders to replace the entire board.
Chesapeake Energy Corp. may have to sell some of its “prized assets” to meet debt obligations, Jefferies analyst Biju Perincheril said in a report issued Tuesday.
Chesapeake executives have said the company plans to sell $9.5 billion to $11 billion in assets by the end of the year to meet debt obligations and fund its planned increased oil production.
Perincheril said Tuesday that the company needs $7 billion in sales this year and another $2 billion next year just to meet its debt obligations. The analyst said he expects Chesapeake to receive about $5 billion for its sale of assets in the Permian basin and another $500 million for a joint venture in the Mississippian formation of northern Oklahoma.
Beyond these, there is not much visibility,” Perincheril said. “Therefore, the company may have to part ways with a portion of its more lucrative undeveloped acreage in the Eagle Ford or Utica.”
Over the longer term, Perincheril said the company “needs to exhibit stricter financial discipline in order to regain investor confidence.” He praised Chesapeake’s plan to hire an independent chairman and supported activist shareholder Carl Icahn’s plan for direct shareholder representation on the board.
We are hopeful that with stronger oversight, Chesapeake will demonstrate more sustained financial discipline in the future,” Perincheril said.
Perincheril has a “buy” rating for Chesapeake with a target stock price of $26.00. Chesapeake stock gained 54 cents, or 3.4 percent, Tuesday to close at $16.35.
The Canada-based retailer is urging its customers to oppose the Keystone XL pipeline project, which it contends is a threat to countless animals, ecosystems and communities.”
Developer TransCanada recently submitted a new application for the $7 billion project, which would bring oil from Canada and North Dakota through the storage hub at Cushing on its way to refineries in the Houston area. The company has committed to building the southern portion of the line from Cushing, but it needs a presidential permit to cross the U.S.-Canada border.
Starting today, LUSH is converting 80 of its shops — including one at Penn Square Mall in Oklahoma City — into polling stations for the next two weeks. The company also is campaigning against the project with environmental organization 350.org.
“By using our shops to give Americans a voice on this issue we hope to stop the Keystone XL pipeline from becoming a reality,” says LUSH Campaigns Director Brandi Halls. “Canada’s tar sands are not the answer to our future energy needs and collectively we must demand that our government put its citizens interests ahead of the oil industry’s.”
LUSH also will donate all proceeds from sales of its limited edition Charity Pot hand and body lotion to 350.org.
The state comptroller of New York is calling for an overhaul of Chesapeake Energy Corp.’s board of directors.
Similar sentiments have been common in recent weeks, as Chesapeake’s stock has fallen precipitously.
Comptroller Thomas P. DiNapoli, who is trustee of the New York State Common Retirement Fund, sent a letter Tuesday to other Chesapeake shareholders urging them to vote against retaining the two board members up for re-election this year, Oklahoma State University President Burns Hargis and former Union Pacific executive Richard K. Davidson.
“Chesapeake’s falling share price and current financial condition are reason enough to WITHHOLD votes from the entire board of directors. However, since only two directors are up for re-election this year, our withhold votes against V. Burns Hargis and Richard K. Davidson should be viewed as a proxy for the performance of the entire board,” DiNapoli wrote.
Hargis and Davidson are members of the Chesapeake board’s audit committee, which is charged with overseeing the company’s financial statements.
DiNapoli said the revelations of the past month, including reports CEO Aubrey McClendon lined up personal loans from an equity firm that has invested in Chesapeake, show that committee has failed to do its job.
“For too long, CEO McClendon has been allowed to dominate the board and the board has failed to perform its critical role in overseeing the company on behalf of its shareholders,” DiNapoli wrote. “As members of the audit committee, directors Hargis and Davidson should be held accountable for the board’s significant failings in its oversight responsibilities.”
DiNapoli said removing those two members from Chesapeake’s board is “a necessary first step toward reconstituting a board that it is currently entrenched an unaccountable to shareholders.”
The New York State Common Retirement Fund is a long-term Chesapeake shareholder. It owned about 3.5 million shares of the company’s stock as of May 18, a DiNapoli spokesman said.
UPDATE, 6:25 p.m.: Read the NewsOK story here.
After a couple of weeks of his rumored buy-in of Chesapeake Energy Corp. stock, investor Carl Icahn filed regulatory papers this afternoon disclosing a 7.56 percent stake in the company. Several partnerships affiliated with Icahn spent more than $785 million to own more than 50 million shares.
Icahn also included a letter to Chesapeake’s board of directors calling for the immediate replacement of four board members. He proposed they should be replaced by two directors picked by Icahn and two directors picked by another large Chesapeake shareholder such as Memphis, Tenn.-based Southeastern Asset Management. Icahn wrote:
Chesapeake shareholders will benefit neither from a constant stream of negative news reflecting upon the companies troubled past, nor from a half hearted attempt by the board to make the minimum possible number of changes to skate by for one more year. The board must not only find a way to eliminate the enormous funding gap, but also the more substantial creditability gap.
UPDATE, 4:55 p.m.
Chesapeake responded with its own statement, saying it shares Icahn’s opinion that its stock is undervalued. The company said it will carefully review Icahn’s letter but its top priority remains finding a new chairman to replace Aubrey McClendon, who will remain as CEO:
“We share Mr. Icahn’s belief that Chesapeake shares are substantially undervalued by the market today. The Board and senior management are executing a plan that we believe will deliver a higher stock price and better recognize the underlying value of the company’s assets. The Board will carefully review Mr. Icahn’s letter. The Board’s immediate priority is to name an independent Non-Executive Chairman and it is proceeding expeditiously toward that objective having consulted with shareholders. After an independent Chairman is named, the Board’s Nominating Committee will consult with shareholders and carefully review Mr. Icahn’s request for Board representation.”
An Oklahoma County district court judge on Friday ruled in favor of Chesapeake Energy Corp. and its directors in a case that could have stopped the company’s efforts to sell assets and pay down debt.
A Chesapeake shareholder had asked the judge for a temporary restraining order that would prevent the company from borrowing money or selling assets until the company would “fully disclose the existence, extent and details” of CEO Aubrey McClendon’s debt and other deals with third parties that also do business with Chesapeake.
The lawsuit essentially tried to resurrect and add to a 2009 case against Chesapeake that has been on hold for three years. Judge Bryan Dixon on Friday denied the motion to allow the case to move forward, allowing Chesapeake to continue with its plan to sell $9.5 billion to $11 billion in assets this year.
Chesapeake Energy Corp.’s stock rallied late Thursday on rumors that activist investors Carl Icahn and BlackRock Investing are buying up stakes in the Oklahoma City energy company.
Bloomberg, Reuters and CNBC each reported Thursday afternoon that Icahn and BlackRock each have acquired at least 4 percent of Chesapeake stock. Investors must report in regulatory filings when they control a 5 percent stake in a publicly traded company.
The Oklahoman reported on May 15 that Chesapeake CEO Aubrey McClendon addressed rumors that Icahn was buying the company’s stock.
We wouldn’t be surprised if Carl became a large shareholder,” McClendon said. “He did in 2010, and within six months, the stock went up 50 percent. He made over $500 million and called me to thank me when it was all over. I have a good relationship with Carl. If he comes in, I’m pretty confident that he’ll make a lot of money.”
Chesapeake stock closed Thursday at $15.58 a share, up 49 cents, or 3.25 percent, on the day. In after-hours trading, the stock price gained another 36 cents, or 2.3 percent, as of 6 p.m.
Sundrop Fuels Inc. is teaming up with technology and engineering supplier ThyssenKrupp Uhde to open the first commercial “green gasoline” plant in the United States.
“Sundrop Fuels’ partnership with ThyssenKrupp Uhde accelerates our ability to contribute to the nation’s renewable fuels goals while moving toward mass-scale green gasoline factories that will improve the environment, create jobs and further our nation’s energy independence,” CEO Wayne Simmons said. “This effort represents the best possible use of today’s technology and natural resources to meet tomorrow’s growing need for affordable, cleanly produced transportation fuel.”
The plant will be designed by more than 70 engineers from the two companies, with plans to start construction late this year. It will use Sundrop’s proprietary biomass conversion technologies to convert forest residue and thinnings with natural gas into “green gasoline.”
The plant, which will be built near Alexandria, La., will be able to produce up to 50 million gallons of renewable gasoline each year.
Sundrop has gotten significant backing from Oklahoma City-based Chesapeake Energy Corp., which invested $155 million in the company last year.
Chesapeake announced the formation of a $1 billion venture capital fund in July to boost demand for natural gas in transportation.