The Oklahoman's energy team members Adam Wilmoth, Jay F. Marks and Paul Monies fielded questions Tuesday during their monthly online chat. This is an edited transcript of that event. To read the entire chat, or to participate in the next chat, go to NewsOK.com.
Q: What is the newest word on Chesapeake? I know several senior level officials have been let go, but I have heard rumors about layoffs. Any idea of size or scale?
Wilmoth: We know there have been scattered layoffs and contractors have been let go. But the company has not provided details. For a company the size of Chesapeake, it must report if layoffs total 500 in Oklahoma City. No such notice has been given.
Marks: New CEO Doug Lawler talked during Chesapeake's earnings call about streamlining operations at the company, but officials have not offered any specifics since then. Lawler said Chesapeake is undergoing a comprehensive review of its operations, which could result in the company shedding some of its affiliates. Chairman Archie Dunham also hinted at job reductions when he came onto Chesapeake's board last summer. He said Chesapeake would be staffed comparably to similar-sized companies. He mentioned Anadarko and Devon. Both companies had about half as many employees as Chesapeake at that time, despite a much larger market cap.
Q: How is SandRidge faring?
Marks: SandRidge has said it will narrow its focus in the Mississippian oil play to key areas where it already has developed expensive infrastructure.
Wilmoth: SandRidge has spoken highly of its production in the Mississippian in northern Oklahoma. It will be interesting to see what production levels are like in the area over the next few quarters.
Q: Can we expect the same level of community support from SandRidge going forward?
Marks: SandRidge allowed its sponsorship of the Oklahoma City Thunder to expire, but new CEO James Bennett said the company will remain active in the community.
Wilmoth: SandRidge and Chesapeake both have said they plan to continue supporting the community financially and otherwise. But it is also clear that both companies also are focusing on reducing costs.
Q: It appears that Oklahoma has a wind energy transmission bottleneck at this point. Any idea when any new transmission projects may be coming on line? Or alternatively, any new big wind projects on the horizon?
Monies: Clean Line Energy is hoping its Plains and Eastern Clean Line will be operational in 2017 or 2018. It's a high-voltage, direct-current line that will take electricity directly from Panhandle wind farms under development to utilities in Tennessee and the Southeast. Other wind projects under active development include Apex's Kingfisher Wind Farm in southern Kingfisher County and northern Canadian County. That's the project that's run into some opposition from a few Piedmont residents.
Q: What's the latest on Devon's Master Limited Partnership? Wasn't that supposed to be ramping up?
Marks: That is on track, but Devon is waiting for ideal market conditions before moving forward with a public offering.
Q: What's the advantage of an MLP?
Marks: Such arrangements bring together the best parts of partnerships and corporations, with tax advantages that can benefit investors. Master limited partnerships don't pay corporate income tax, so there is more cash available to pay those who hold partnership units.