Privately-owned Chief Oil & Gas LLC has confirmed that it plans to close its Appalachian headquarters in Western Pennsylvania by the end of October as part of a broader administrative consolidation within the company.
Based in Dallas, TX, Chief is primarily a Marcellus Shale pure-play operator, having grown its position to 210,000 acres since 2007, when it drilled its first well in the play. Company spokeswoman Daria Fish said Chief would close its regional headquarters in Wexford, PA -- about 17 miles north of Pittsburgh. The company operates two other regional offices in the state in Montoursville and Wyalusing, which are both located in Northeast Pennsylvania more than 200 miles away from the Wexford location.
"Chief Oil & Gas has consolidated some key technical functions to its corporate offices in Dallas and to its regional office in Montoursville. These changes were made to improve efficiency and communications,"Fish said in an email. "They do not reflect any change in the company's commitment to the Marcellus and the Commonwealth of Pennsylvania."
In 2012, the company said it employed 40 workers throughout the state. That number has since grown, but by how much is unclear. Fish noted that the company would continue to employ 45 full-time employees in the state, but did not provide further comment when asked how many workers would be affected or laid off after the closure. Some have reportedly been offered transfers to other offices, while others have been offered severance packages. That could not be verified with the company, however.
The closure comes at a time when the state's oil and gas industry is retrenching amid the commodities downturn. At least three active Marcellus producers, including Consol Energy Inc., Chevron Appalachia LLC and Range Resources Corp. have said publicly since the beginning of the year that they would either lay off workers or close offices (see Shale Daily, July 20; Feb. 25; Jan. 23).
In the last three months alone, industry companies have laid off 365 workers, mostly in the oilfield services sector, according to a brief review of WARN Notices posted by the Pennsylvania Department of Labor & Industry. The notices are required by federal law anytime a business plans layoffs of 50 or more employees.
Chief has been issued 528 horizontal drilling permits across the state since 2008, according to state data. The bulk of its current acreage, however, is located in Bradford, Lycoming, Sullivan, Susquehanna, Tioga and Wyoming counties. It's acreage position grew to 210,000 acres in 2013 when it made a $500 million acquisition from Chesapeake Energy Corp. (see Shale Daily, Dec. 18, 2013).
Chief’s permit activity has declined over the last three years. It was issued 164 permits in 2013; 120 permits in 2014 and it has received just 17 permits so far this year, according to state data. Fish said the company produced 200 Bcf of natural gas last year.