(Bloomberg) — Southwestern Energy Co., and Chesapeake Energy Corp. are close to a merger that would create a roughly $17 billion company, ranking as one of the largest natural gas producers in the US, the Wall Street Journal reported.
A deal could come together as soon as next week, the newspaper said, citing people familiar with the situation. Buying Southwestern would solidify Chesapeake’s focus on natural gas. It would also put the company in a better position to capitalize on global demand for liquefied natural gas shipments from the US Gulf Coast.
Shares of Southwestern Energy surge 9.5% at 3:21 pm in New York, while Chesapeake rose 1.1%.
The acquisition would make Chesapeake’s gas production larger than its biggest rival, EQT Corp., and expand its holdings in two key gas drilling regions: the Marcellus basin in Appalachia and the Haynesville basin in Louisiana and east Texas. The potential merger comes as US oil and gas producers are increasingly buying up competitors as they push cut costs and increase future production.
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