Chesapeake Energy Co. would be willing to donate a penny per thousand cubic feet (Mcf) of gas produced to pay for a broad-based U.S. public education campaign on critical energy supply and demand issues.
So said chairman, president and chief executive Aubrey McClendon at the Deloitte oil and gas conference in Houston last month.
The Oklahoma City-based company-one of the top three independent gas producers in the U.S.-already participates in a similar program that's been under way in Oklahoma for many years, he added.
Funds are used to educate the public and media about the importance of energy to the economy, the positive environmental practices of the industry, the need for new employees, and the need for greater access to acreage for drilling.
Chesapeake produces more than 1.6 billion cubic feet of gas equivalent per day-so the penny-per-Mcf offer would cost $16,000 a day.
Speaking at a recent meeting of the Houston Society of Financial Analysts, McClendon said Chesapeake's dedication to strategy has helped it become the third-largest U.S. independent gas producer. It now has about 121 operated rigs and 8.4 trillion cubic feet equivalent of proved reserves.
Most E&P companies have asset bases that are too diversified and too spread out, he said. Chesapeake is staying focused on the onshore areas of the southwest U.S. and the Appalachian Basin.
"You can't dabble in several areas. Just pick one and dominate it." Companies that don't often suffer from "operational mediocrity, an incoherent operational strategy and resulting investor unease about the future," he added.
Chesapeake's buying strategy is very focused. Knowing what to buy, where it should be bought and how it should be bought are key, he added. "Inexperienced or occasional buyers generally do not succeed...We have approximately 50 people working full-time just on acquisition integration."
The company also owns many of its own drilling rigs, with direct investments in drilling companies such as DHS Drilling Co. and Mountain Drilling Co. (For more on this, see "A Rig of One's Own" in this issue.)
The plan to remain proactive, with a greater focus on offense than defense, won't change. "We want to continue to capture strong margins on acquisitions and secure above-average prices on base production...We always want to be at the ready to sell gas for more than it's worth."
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