Chesapeake Business Practices

[PhiAlpha]

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.

Anadarko never declared that OKC was going to be the company headquarters, it was always going to remain in Houston with at best an OKC satellite office. This is not anywhere near the same type of situation and is in fact nearly the opposite.

[PhiAlpha]

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?

Completely speculative but I would guess we end up with a 900-1000 employee local presence over the next few years that grows in the long term if natural gas prices can hold around $3.00 or go up. If LNG exports ever take off, CHK will be become more aggressive in upstream development and that growth increases.

[OKCRealtor]

Very glad to hear CHK is staying put, seems like best case scenario situation given all the possible outcomes last few years. It would be nice if this were actually adding enough jobs to make some sort of impact but it doesn't sound like that is the case. We are no longer dependent on O&G economically but it sure would be nice if we could get another little boom from the industry!

[Plutonic Panda]

Why are they changing the name? Is there a bad association with it?

[Pete]

Just learned from an employee that they have been notified that all the OKC employees of the combined organization will be consolidated into Building 15.

Was told there is about 800 offices in there.

Will leave just a ton of excess buildings and land.

[Pete]

I posted this on this business thread because it related to the merger, but any discussion of the real estate should go here:

Chesapeake Empire Marches On

[gopokes88]

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.

As shale matured, with covid really accelerating the process, they simply don’t need the head counts anymore. Industry wide.

The entire logic for this M&A was how closely intertwined their assets are. Even doubling the acreage, if both companies have 5 PEs, post acquisition it can be done with 7. Maybe even 6.

[PhiAlpha]

Just learned from an employee that they have been notified that all the OKC employees of the combined organization will be consolidated into Building 15.

Was told there is about 800 offices in there.

Will leave just a ton of excess buildings and land.

Interesting. On the surface that makes zero sense unless they are planning to sell or at minimum redevelop the rest of the original campus.

[PhiAlpha]

Why are they changing the name? Is there a bad association with it?

In general, it’s not great. Probably looking for a fresh start and I don’t blame them.

just hope they don’t come up with something like one of the stupid names that have come out of other mergers recently.

[BimmerSooner]

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.

Maybe so. But I'll stick by my guesstimate of OKC gaining 200-250. $400M in "synergies" won't all be from G&A cuts, obviously. It'll come from a combination of G&A, capital/operational efficiencies, supply chain, etc. With a little BS mixed in there too. In my opinion, laying off half of SWN's current workforce is unlikely. That would be massive. That said, I agree there will some level of layoffs both places, unquestionably. Having been a Director at CHK for a number of years, and going through 5 layoff cycles in 6 years and having to make those decisions...ugh. I hope someday this all stops and it can become--to the extent O&G upstream can be--more stable for everyone. It's been an unprecedented 10 year run of constant cuts.

[Pete]

Maybe so. But I'll stick by my guesstimate of OKC gaining 200-250. $400M in "synergies" won't all be from G&A cuts, obviously. It'll come from a combination of G&A, capital/operational efficiencies, supply chain, etc. With a little BS mixed in there too. In my opinion, laying off half of SWN's current workforce is unlikely. That would be massive. That said, I agree there will some level of layoffs both places, unquestionably. Having been a Director at CHK for a number of years, and going through 5 layoff cycles in 6 years and having to make those decisions...ugh. I hope someday this all stops and it can become--to the extent O&G upstream can be--more stable for everyone. It's been an unprecedented 10 year run of constant cuts.

A CHK employee told me told he expects the net change to be near zero; which means a total of 650 or so. Makes sense because they plan to consolidate into a single building.

He said some CHK employees will be sent to Spring.

[Bowser214]

I feel like this is big news but I admit I know very little about the industry
https://www.prnewswire.com/news-rele...302060317.html

[soonergolfer]

This deal had to have been finalized prior to LNG export terminal permit freeze by the administration 2 or 3 weeks ago. I wonder if that will effect this deal or any others that were in the works.

[gopokes88]

More of an event 5-10 years down the road. There's still plenty that have been permitted that will start construction. Plus if an admin change occurs in November it's quickly reversed.