West Virginia Department of CommerceSecretary Keith Burdette said Thursday at an industry conference in Pittsburgh that the state expects Odebrecht SA affiliateBraskem SA to acquire additional tracts of property in Parkersburg in the coming weeks for its proposed multi-billion dollar ethane cracker. In April 2015, the companies said plans for the ethane cracker in Wood County, WV, would be postponed pending further project analysis amid the commodities downturn (see Shale Daily, April 23, 2015). But Burdette, who supports the facility, noted that neither Braskem, nor PTT Global Chemical (PTTGC) pcl and Shell Chemical Appalachia LLC, which have also proposed crackers in Ohio and Pennsylvania, respectively, have scrapped plans for their projects. Burdette said his office expects Braskem to acquire more land sometime by the end of 1Q2016. He added that his office stays in close touch with the company and others that have made similar proposals for the region. He said that Braskem, Shell and PTTGC have each “expressed a desire” to push final investment decisions until 2017. Braskem has filed for certain permits for the cracker and has been acquiring land in Wood County since about 2013, when the facility was first announced (see Shale Daily, Aug. 27, 2014; May 19, 2014; Nov. 14, 2013).
Chesapeake Energy Corp.said it has stopped paying dividends on each series of its outstanding convertible preferred stock. The Oklahoma City-based independent, the second-largest natural gas producer in the United States after ExxonMobil Corp., has faced financial pressure under persistently low commodity prices. In addition to continuing to look for buyers for some of its assets, last July it scrapped its common dividend (see Shale Daily, July 21, 2015). Suspending the preferred stock dividend “does not constitute an event of a default” under the revolving credit facility or outstanding bond indentures, the company said. “The board and management believe this decision is in the best long-term interest of all company stakeholders,” CEO Doug Lawler said. The decision to suspend the preferred stock dividends “will allow the company to retain approximately $170 million of additional cash per year and use these funds to purchase debt at significant discounts in the near term. Given the current commodity price environment for oil, natural gas and natural gas liquids, we believe that redirecting this cash toward debt retirement provides better returns for the company. We currently have senior debt securities trading at significant discounts, and we will continue to take advantage of that within the coming year.”
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