Chesapeake Business Practices

[Pete]

The Oklahoman speculating that there is a good chance the combined companies would be based in Texas, with CHK completely pulling out of OKC.

Well less than 1,000 employees working in OKC but it would be devasting if their complex -- less a small amount of sub-let space -- went completely dark.

With large office vacancies, the incredibly spread-out campus might be better suited for a school or housing. I could see a big apartment conversion; would be very hard to created high-end condos then have the homeowners park in various parking garages.

https://www.oklahoman.com/story/busi...t/72160966007/

[BridgeBurner]

Man I hope that article is all hypothetical...

[gopokes88]

That’s counter to everything I’ve heard.

Article is speculating too. Doesn’t have anything sourced. Given the Oklahoman’s new owners, feels click baity

[Dob Hooligan]

Although I wonder if author Richard Mize knows something and isn't talking, I am more convinced it is just a real estate "what if" story. Looks to me that Mize has become almost entirely commercial real estate focused in recent years.

[chssooner]

Although I wonder if author Richard Mize knows something and isn't talking, I am more convinced it is just a real estate "what if" story. Looks to me that Mize has become almost entirely commercial real estate focused in recent years.

Very much this. It's a "What if" story. Not a sourced story.

[PhiAlpha]

The Oklahoman speculating that there is a good chance the combined companies would be based in Texas, with CHK completely pulling out of OKC.

Well less than 1,000 employees working in OKC but it would be devasting if their complex -- less a small amount of sub-let space -- went completely dark.

With large office vacancies, the incredibly spread-out campus might be better suited for a school or housing. I could see a big apartment conversion; would be very hard to created high-end condos then have the homeowners park in various parking garages.

https://www.oklahoman.com/story/busi...t/72160966007/

Yeah I didn't really get "good chance" out of that article, more like exploring whether it was even a possibility and if so, what would become of the campus.

But regardless, from everything I've heard the combined company would be here and this is being spoken of similar to Devon's merger with WPX. All the public reports so far seem to indicate that CHK initiated and has been leading the merger talks. Could always be wrong but I think the chances that the HQ goes to Houston are extremely low.

[fortpatches]

The Oklahoman speculating that there is a good chance the combined companies would be based in Texas, with CHK completely pulling out of OKC.

Well less than 1,000 employees working in OKC but it would be devasting if their complex -- less a small amount of sub-let space -- went completely dark.

With large office vacancies, the incredibly spread-out campus might be better suited for a school or housing. I could see a big apartment conversion; would be very hard to created high-end condos then have the homeowners park in various parking garages.

https://www.oklahoman.com/story/busi...t/72160966007/

I realize there are different demands for office space between the two, but the Sprint campus in Overland Park, KS seems like it would be a similar situation for comparison to what would happen - a pretty large corporate campus that is basically no longer needed due to a merger. It got filled with like call centers and other office grunt work companies.

[Swake]

Have the state buy it as a replacement for all the decrepit buildings they have around the capitol and all over OKC. Leave the capitol building, demolish the rest. Make the capitol area a park.

[DowntownMan]

It’s official

Merger occurring. New name after it closes. HQ stays in Oks with significant Houston office remaining (for now as things always change after closing)

[G.Walker]

Good deal, glad they are staying in OKC. Now we just need them to add jobs, and fill up some of that back office space on the old Chesapeake campus.

[BG918]

It’s official

Merger occurring. New name after it closes. HQ stays in Oks with significant Houston office remaining (for now as things always change after closing)

I would imagine they would keep a pretty large Houston presence but move some HQ positions to OKC.

The reality of the O&G world is that what used to take dozens of people now only takes a few so filling up the remaining buildings will still be a challenge. Same for the Devon Tower, etc

[PhiAlpha]

Official release: https://investors.chk.com/2024-01-11...S-ENERGY-REACH

Glad everything played out like it sounded like it was going to. Just wonder if the presence they’re keeping in Houston will be temporary or if they’ll maintain an office down there long term.

Probably a good plan changing the name, but pour one out for CHK. What a wild run for that company.

[BimmerSooner]

Having worked at CHK for a number of years, it's a bit bittersweet to hear of the name change. But, it happens and glad it appears to be working out for the current employees here and for OKC at large.

Southwestern operates in the Haynesville Shale, and in the Utica and Marcellus Shales of Appalachia. They currently have about 900-1,000 employees. I'm going to speculate that approximately 40% of the employees are in the field offices and there wouldn't be significant changes in those, but maybe an office merger or two. But that wouldn't affect OKC. Of the remaining "HQ" employees in Spring, TX (and anywhere else)--approximately 500-600 I would think--I would guess roughly half would be relocated to OKC. The press release very cleverly uses the term "material" to describe the presence to remain in Houston. What does "material" mean in real number terms...who knows? But it certainly does not commit to a remaining presence in Houston that is equal to what is there now. I think it is reasonable to speculate that OKC could gain, at most, 200-250 employees.

Of course, all of this said, there will likely be layoffs with this merger--both of CHK and of SWN employees. The cost-savings and synergies about which they speak normally include those associated with "right-sizing" the workforce, unfortunately.

[PhiAlpha]

Having worked at CHK for a number of years, it's a bit bittersweet to hear of the name change. But, it happens and glad it appears to be working out for the current employees here and for OKC at large.

Southwestern operates in the Haynesville Shale, and in the Utica and Marcellus Shales of Appalachia. They currently have about 900-1,000 employees. I'm going to speculate that approximately 40% of the employees are in the field offices and there wouldn't be significant changes in those, but maybe an office merger or two. But that wouldn't affect OKC. Of the remaining "HQ" employees in Spring, TX (and anywhere else)--approximately 500-600 I would think--I would guess roughly half would be relocated to OKC. The press release very cleverly uses the term "material" to describe the presence to remain in Houston. What does "material" mean in real number terms...who knows? But it certainly does not commit to a remaining presence in Houston that is equal to what is there now. I think it is reasonable to speculate that OKC could gain, at most, 200-250 employees.

Of course, all of this said, there will likely be layoffs with this merger--both of CHK and of SWN employees. The cost-savings and synergies about which they speak normally include those associated with "right-sizing" the workforce, unfortunately.

CHK slipped this in there:

“Annual operational and overhead synergies of approximately $400 million: Identified synergies will enhance shareholder value through improved capital efficiencies and operating margins driven by longer laterals, lower drilling and completion costs, G&A reductions, and the utilization of shared operational infrastructure.”

Followed by this:

Creates global platform to expand marketing and trading business, reaching more markets, mitigating price volatility and increasing revenue: In order to maximize value of the combined company's scale of production, Investment Grade quality capital structure and 100% certified Responsibly Sourced Gas, the company will build a global marketing and trading presence in Houston to supply lower-cost, lower carbon energy to meet increasing domestic and international LNG demand.”

So it sounds like the material presence in Houston will primarily be related to trading and midstream/downstream type personnel with most of the upstream folks being in OKC, which makes sense.

[BimmerSooner]

CHK slipped this in there:

Followed by this:

So it sounds like the material presence in Houston will primarily be related to trading and midstream/downstream type personnel with most of the upstream folks being in OKC, which makes sense.

Agree 100%.

While huge numbers won't be transferred to OKC, they'll be very high paying jobs and will be a nice boost to the local economy. And, more than anything, it helps to stabilize "CHK's" presence in OKC for the long term, which until now, I felt was quite uncertain.

[gopokes88]

Surprised at the name change. Glad it’s confirmed they’re staying in okc.

[LocoAko]

Official release: https://investors.chk.com/2024-01-11...S-ENERGY-REACH

Glad everything played out like it sounded like it was going to. Just wonder if the presence they’re keeping in Houston will be temporary or if they’ll maintain an office down there long term.

Probably a good plan changing the name, but pour one out for CHK. What a wild run for that company.

I feel like I'm going crazy, but what is the new name? I am not seeing it in the press release (probably skimming too fast).

[PhiAlpha]

I feel like I'm going crazy, but what is the new name? I am not seeing it in the press release (probably skimming too fast).

Haven’t announced it yet. Just confirmed in the press release that they plan to change it.

[PhiAlpha]

Agree 100%.

While huge numbers won't be transferred to OKC, they'll be very high paying jobs and will be a nice boost to the local economy. And, more than anything, it helps to stabilize "CHK's" presence in OKC for the long term, which until now, I felt was quite uncertain.

Yeah for years it seemed like their mountain of debt and low natural gas prices kept them safe from being acquired…this certainly feels like a much more sustainable way of assuring they’ll stay here lol.

Having the largest natural gas company in the country headquartered here is a big deal. Especially given everything that’s happened in the energy industry over the last 10-15 years. Feels like a big win for OKC regardless of how much that impacts employment numbers in the immediate future.

[Pete]

So, best case scenario, beside the existing 680 or so employees on that campus, what will be the net increase in employees once they've done all their consolidation?

[gopokes88]

Probably close to flat in OKC maybe grows by 100.

$400 million in synergies translates to 500 getting laid off.

SWN has 1,000 employees.
~150 stay in Houston as part of the marketing group.
300 field employees left alone.
500 layoffs.

~50-100 coming to okc. (there will be chk layoffs here.)

They’ll grade everyone out. Lowest performers get laid off so the new company retains as much high level talent as possible.

[progressiveboy]

Glad to hear that they will keep their HQ's in OKC, considering that Houston is the O&G capital of the world. It would have been a psychological blow to OKC if they had moved to the Houston area. I hope they will grow their employee base and there will be some corporate transfers. Those transfers are always good as homes get bought, bank accounts opened, contributing to the tax base and Chesapeake continues to be philanthropic and a great corporate citizen!

[Pete]

Probably close to flat in OKC maybe grows by 100.

Thanks.

That will mean that the huge majority of their buildings will remain empty. Maybe the new entity will finally get serious about selling parts off of just leasing it out.

However, this is a terrible time to be trying to rent Class A office space in OKC, which is why CHK has had things available for years.

[king183]

Thanks.

That will mean that the huge majority of their buildings will remain empty. Maybe the new entity will finally get serious about selling parts off of just leasing it out.

However, this is a terrible time to be trying to rent Class A office space in OKC, which is why CHK has had things available for years.

I think I've posted this before, but my company tried to lease one their empty buildings and we were very far into the process, but CHK was extremely difficult to work with so we ultimately abandoned the efforts at the goal line. When I mentioned this to a commercial real estate agent who works with them, she said that CHK truly doesn't care if they sit empty, which seems like an odd position to take.

[ChaseDweller]

I hope we don't see a Kerr McGee style stealth move to Houston, where they committed to stay in OKC and then slowly moved everyone to Houston over time until they building was empty.