Chesapeake Energy Corp (CHK)

[msmithgold]

EQT Activist pushes for consolidation in Appalachia

Summary of the letter
Potential E&P-related synergies:
- Enhanced present value and well IRRs through contiguous acreage and longer laterals
- Improved capital allocation from drilling best locations of the merged footprint
- Enhanced Marcellus/Utica and wet/dry production optionality
- Realized prices/netbacks optimization
- Financial flexibility would enable higher production growth
- Offer a bigger/better platform for strategic delineation
- Increased reservoir understanding and improved well development

Potential Midstream and Marketing-related synergies:
- Coordinated field gathering and compression development enabling reduced capital spending
- Increased pipeline fee income from OVC and MVC pipelines
- Equitrans could be expanded with additional captive volumes
- EQGP unit price appreciation resulting from improved EQM distribution growth
- Combined company to have more leverage with pipeline companies and end-market customers

https://investoralmanac.com/2017/01/05/activist-pushes-eqt-on-a-merger-with-antero-or-range/