Chesapeake

An Oklahoma tax break for horizontal wells enacted in 2010 is depriving the Sooner State of revenue that could beef up its rainy day fund and should be reconsidered, the state’s secretary of finance and revenue said.

Chesapeake Energy Corp. shareholders earlier this month reelected the board of directors, but rejected separate proposals to implement proxy access, reincorporate in Delaware and declassify the board, the last of which would have made it easier to replace the entire board in one fell swoop.

Robert Douglas Lawler, tapped to be CEO of Chesapeake Energy Corp. beginning June 17, will earn more than co-founder and predecessor Aubrey McClendon, according to a Securities and Exchange Commission (SEC) filing (see Daily GPI, May 21). The compensation package for the first year of employment has the potential to total at least $22 million, if Lawler hits his bonus targets, the SEC Form 8-K indicated. Base salary is set at $1.25 million a year, with a cash bonus of at least $800,000 the first year, a cash signing bonus of $2 million, and shares and options worth $18 million. About $7.5 million of the shares and options are to be paid over the next five years. If Lawler stays for five years, he is to receive another $5 million. About $12.5 million of the share awards are to compensate for losses in pensions and benefits for leaving Anadarko Petroleum Corp. By comparison, McClendon earned a base salary of $975,000 in 2012, with total remuneration of $16.9 million, according to company documents. However, McClendon also earns, and will continue to earn through June 2014, up to 2.5% in profits on wells that the company drills.

Sanchez Energy Corp., which targets the liquids-rich Eagle Ford Shale, charted first quarter production of 355,000 boe, an increase of 106% from the fourth quarter and 320% from the year-ago period, the company said.

Department of Energy (DOE) Secretary-designate Ernest J. Moniz fielded questions about his position on hydraulic fracturing (fracking), natural gas exports and climate change during his confirmation hearing Tuesday before the Senate Energy and Natural Resources Committee.

A district court judge wants the highest court in West Virginia, the Supreme Court of Appeals, to certify whether existing state law allows a company to drill on land where it doesn’t own the surface rights, but it owns the underlying mineral rights.

Wyoming Gov. Matt Mead is considering a pre-drilling water testing requirement for oil and natural gas operators in the state.

The Marcellus Shale Coalition (MSC) announced this week that Chesapeake Energy Corp. vice president of government affairs Dave Spigelmyer has been re-elected as the organization’s chair. Randy Albert (COO, Gas Operations, CONSOL Energy), Scott Roy (vice president, Government and Regulatory Affairs, Range Resources Corp.) and John Mollenkopf (senior vice president and COO, MarkWest Energy Partners) were re-elected as vice chair, treasurer and secretary, respectively. The 2013 executive board members are: Dave Cannon, deputy general counsel, Government and Environmental Affairs, EQT Corp.; Jeff Kupfer, senior advisor, Policy and Government Affairs, Chevron; Heather Lamparter, vice president, Legal, EXCO Resources (PA), LLC; Craig Mayer, general counsel, Pennsylvania General Energy; Gary Smith, vice president and general manager, EOG Resources; and Jack Williams, president, XTO Energy. John Bonn, president of NiSource Midstream Services, NiSource Gas Transmission & Storage, and Terry Bossert, senior vice president, Environment & Regulatory Affairs, Chief Oil & Gas, were elected by their peers to serve as at-large members of the Executive Board. Formed three years ago as an organization tasked with addressing issues regarding the production of natural gas from the Marcellus and Utica Shale plays, the MSC has grown to a diverse, member-driven organization representing virtually every business segment along the robust shale supply chain in the region.

As natural gas moves into various segments of the transportation sector, there is CNG, LNG and now DNG — diesel natural gas. A unit of Oklahoma-based Chesapeake Energy said Thursday it is offering a conversion kit to allow diesel-powered vehicles to run on DNG.