Fracking BOOM!

Last week, Chesapeake Energy Corp., the nation's leader in hydro-fracking, announced it will immediately stop all shale drilling in eastern Ohio.  The company is also ceasing all shale drilling activities in western Pennsylvania and in parts of Texas and Wyoming.  The fracking boom which they pioneered has made oil/gas prices too low for them to frack profitably!   Now it's a bust.  How ironic.

Chesapeake, which is the largest holder of drilling permits in Ohio and has drilled 700 wells in the state, reported a net loss of $14.9 billion in 2015.

Company officials concluded last week's announcement by saying, "Adios, Ohio!  Enjoy the wastewater and the earthquakes."

Chesapeake was founded by Aubrey McClendon, a high-rolling proselytizer for fracking.  His scheme was to obtain drilling leases from landowners, then sell those leases to actual oil/gas producers for many times more than he'd paid, and use the profits to obtain more leases, sell those and keep the whole thing rolling.  It was a highly-leveraged lease-flipping scheme based on the assumption of relatively high and stable oil/gas prices.  Oops.

McClendon was forced out as Chesapeake's CEO in 2013 due to financial improprieties.  He formed another oil/gas company.  Chesapeake sued him in 2015 for stealing trade secrets and other illegal noncompetitive behavior.

On Tuesday of this week, a federal grand jury in Oklahoma indicted McClendon for gas lease price fixing and bid-rigging.

Yesterday in Oklahoma City, McClendon killed himself by driving his vehicle at high speed straight into a bridge abutment.  Fracking BOOM!

http://bustergammons.blogspot.com/2013/08/dont-be-downstream.html