For now, the market appears to have emerged from a heated debate over what is the correct Chesapeake Energy, a pioneer in the U.S. shale revolution, said it would focus on its U.S. shale gas projects and make the Eagle Ford oil production project a non-core business , the future will turn to natural gas and LNG exports.
Chesapeake Energy, a pioneer in shale gas production during the first shale revolution, went through bankruptcy in 2020 when oil and gas prices collapsed.
The company said in its second-quarter earnings release this week that it is strengthening its strategic focus on natural gas assets with an eye toward the future development of shale gas assets, while viewing Eagle Ford as a non-core area for future capital allocation strategies, Investments in Eagle Ford and crude oil extraction activities at Eagle Ford will be reduced.
Nick Dell’Osso, President and CEO of Chesapeake Energy, said:
Crude oil production in Eagle Ford is no longer strategically central to our future capital allocation, and we will increase our capital allocation to shale gas exploration in the second half of this year and in 2023 to deliver return-driven growth.
After the outbreak of the Russian-Ukrainian conflict, the West imposed sanctions on Russia, and Europe also fell into an energy crisis. Chesapeake has ramped up its investment in natural gas and increased supplies to U.S. LNG export facilities as European countries aggressively seek supplies to wean themselves off Russia.
Chesapeake Energy said it has a gas supply agreement with the Golden Pass LNG terminal. The Golden Pass LNG terminal in Sabine Pass, Texas, a joint venture between Qatar Petroleum and ExxonMobil, is expected to begin operations in 2024.
Dell’Osso said in an interview with foreign media:
“We help the world like any other company by supplying natural gas. The U.S. is now more fully connected to the rest of the world through LNG exports, and that connection will nearly double in the next five to seven years.”