Chesapeake Energy Corporation (NYSE:CHK) is committed to responsible development of the Marcellus Shale region in Pennsylvania, and is therefore investing heavily in repairing and rebuilding the area’s road infrastructure.
According to this news item in the thedailyreview.com, the company made public its initiative in respect of ongoing and completed road projects, as well as those expected to be ready shortly in Bradford County.
The investments by Chesapeake Energy Corporation (NYSE:CHK) are expected to improve regional transport infrastructure, which will benefit the inhabitants as well as the company’s projects.
To put the size and scale of Chesapeake Energy Corporation (NYSE:CHK)’s road initiative in perspective, the company has already pumped in $300 million since 2010 in the repair and renovation of over 450 miles of roads in Northern Pennsylvania. Another influx of approximately $25 million would be spent on refurbishing state roads 56 miles in length. About $15 million would help rebuild township roads.
The immediate projects and their work schedules announced by the company in Bradford County are:
|Road No||Length in miles and type of work||Description||Schedule|
|SR187||8 miles, paving||Terry and Wilmot townships from the Wyalusing bridge to the Wyoming County line||Aug 27-31|
|SR2005||2.4 miles, roadbase stabilization||Wilmot Township from Douglas Rd. to Tyler Rd.||Aug 27-29|
|SR2006||1.3 miles, clean-up work||Wilmot Township from Route 187 to SR2001 (Sugar Hill Rd.).||Aug 27-29|
It is laudable that Chesapeake’s initiatives to develop the area come despite its change of focus from dry-gas plays (such as Marcellus, northern Pennsylvania) to liquid rich plays (such as Marcellus, northern panhandle of West Virginia, Utica).
It may be noted that Northeastern Pennsylvania is a dry gas play, and prices of gas are at multi-year lows. In January, CChesapeake Energy Corporation (NYSE:CHK)’s Chief Executive Officer, Aubrey McClendon, was reported to have said, “An exceptionally mild winter to date has pressured U.S. natural gas prices to levels below our prior expectations and below levels that are economically attractive for developing ‘dry’ gas plays in the U.S., shale or otherwise.”
“We are redeploying rigs from our dry gas plays, such as northeastern Pennsylvania, to our liquid-rich plays,” said Stacey Brodak, senior director of corporate development at the time. “When Chesapeake began drilling the Marcellus Shale, we were focused on natural gas. Since then, the focus has shifted toward liquids-rich shale plays. A portion of the Marcellus in the Northern Panhandle of West Virginia is liquid rich, as well as a large portion of the Utica Shale.”
Chesapeake Energy Corporation (NYSE:CHK) is currently in the midst of a cash crunch, and is trying to raise funds by selling off asset sales. Analysts are of the view that the cash crunch could worsen in the light of all-time low gas prices, and could only be relieved by sale of oil and gas properties. Yet, down the line, these valuable assets could be sorely missed in the event of a cyclical reversal in oil and gas prices.