M&A moves

Houston energy company to combine with Chesapeake in $7.4B deal

Houston-based Southwestern Energy will combine with Oklahoma City-based Chesapeake Energy. Photo via swn.com

Chesapeake Energy and Southwestern Energy are combining in a $7.4 billion all-stock deal to form one of the biggest natural gas producers in the U.S.

There have been a string of deals in the energy sector, including the nearly $60 billion acquisition of Pioneer Natural Resources by ExxonMobil and a $53 billion deal between Chevron and Hess.

Southwestern shareholders will receive 0.0867 shares of Chesapeake common stock for each outstanding share of Southwestern common stock at closing.

Chesapeake shareholders will own about 60 percent of the combined company, while Southwestern shareholders will own approximately 40 percent.

The transaction, valued at $6.69 per share, will create a company that has large scale acreage in the Appalachia region and Haynesville, Louisiana. It has current net production of approximately 7.9 Bcfe/d with more than 5,000 gross locations and 15 years of inventory.

“The world is short energy and demand for our products is growing, both in the U.S. and overseas," Chesapeake CEO Nick Dell’Osso said in a prepared statement Thursday. "We will be positioned to deliver more natural gas at a lower cost, accelerating America’s energy reach and fueling a more affordable, reliable, and lower carbon future."

The combined company will build a facility in Houston to supply lower-cost, lower carbon energy to meet increasing domestic and international liquefied natural gas demand.

The combined company will have a new name, but that has not yet been disclosed.

The boards of both companies have approved the deal, which is expected to close in the second quarter. It still needs approval from Chesapeake and Southwestern shareholders.

Shares of Southwestern, based in Houston, declined more than 3 percent before the market opened, while shares of Chesapeake, based in Oklahoma City, Oklahoma, rose slightly.

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A View From HETI

Rice University scientists' “recharge-to-recycle” reactor has major implications for the electric vehicle sector. Photo courtesy Jorge Vidal/Rice University.

Engineers at Rice University have developed a cleaner, innovative process to turn end-of-life lithium-ion battery waste into new lithium feedstock.

The findings, recently published in the journal Joule, demonstrate how the team’s new “recharge-to-recycle” reactor recharges the battery’s waste cathode materials to coax out lithium ions into water. The team was then able to form high-purity lithium hydroxide, which was clean enough to feed directly back into battery manufacturing.

The study has major implications for the electric vehicle sector, which significantly contributes to the waste stream from end-of-life battery packs. Additionally, lithium tends to be expensive to mine and refine, and current recycling methods are energy- and chemical-intensive.

“Directly producing high-purity lithium hydroxide shortens the path back into new batteries,” Haotian Wang, associate professor of chemical and biomolecular engineering, co-corresponding author of the study and co-founder of Solidec, said in a news release. “That means fewer processing steps, lower waste and a more resilient supply chain.”

Sibani Lisa Biswal, chair of Rice’s Department of Chemical and Biomolecular Engineering and the William M. McCardell Professor in Chemical Engineering, also served as co-corresponding author on the study.

“We asked a basic question: If charging a battery pulls lithium out of a cathode, why not use that same reaction to recycle?” Biswal added in the release. “By pairing that chemistry with a compact electrochemical reactor, we can separate lithium cleanly and produce the exact salt manufacturers want.”

The new process also showed scalability, according to Rice. The engineers scaled the device to 20 square centimeters, then ran a 1,000-hour stability test and processed 57 grams of industrial black mass supplied by industry partner Houston-based TotalEnergies. The results produced lithium hydroxide that was more than 99 percent pure. It also maintained an average lithium recovery rate of nearly 90 percent over the 1,000-hour test, showing its durability. The process also worked across multiple battery chemistries, including lithium iron phosphate, lithium manganese oxide and nickel-manganese-cobalt variants.

Looking ahead, the team plans to scale the process and consider ways it can sustain high efficiency for greater lithium hydroxide concentrations.

“We’ve made lithium extraction cleaner and simpler,” Biswal added in the release. “Now we see the next bottleneck clearly. Tackle concentration, and you unlock even better sustainability.

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