CHESAPEAKE ENERGY NOW LIKES WEST VIRGINIA

(08/07/2007)
One of the nations largest gas producers, Chesapeake Energy, has changed its mind about not doing business in West Virginia.

In addition to building a regional office at Jew Lew, in Lewis County, the company has announced it will invest $25 million to $35 million to erect a futuristic regional headquarters building at NorthGate Business Park in Charleston.

After a Roane County jury found the company guilty of cheating West Virginia royalty owners, awarding the plaintiffs $404 million, Chesapeake executives went on a major media campaign saying they were not going to build their executive headquarters in Charleston and would likely pull out of West Virginia.

Chesapeake demanded Gov. Joe Manchin and the WV legislature correct legal issues around royalty interests.

At the center of the maelstrom, the company was deducting production costs from royalty holder's checks.

Now, executives are saying the investment "makes a strong statement about our commitment to West Virginia." Tom Price, Chesapeake's senior vice president of corporate development, said "It's something we've planned to do since we first got to town.

Following the suit, Spencer newspaper publisher David Hedges reported Chesapeake's elbow-to-elbow leasing activity in the Roane County courthouse.

A groundbreaking ceremony is scheduled August 23 at the 27-acre site Chesapeake purchased last summer.

Oklahoma City-based Chesapeake entered West Virginia in 2005 when it bought Columbia Natural Resources for $2.2 billion.

"Of course we're frustrated with the (court) decision," Price said. "We felt our side of the case was sound. But you don't change your entire attitude about the potential for this office merely because we've had some disappointment."

The case will be appealed to the Supreme Court.

Chesapeake was behind a major ad campaign called "Coal Is Filthy" in Texas. The campaign was designed to persuade Texas officials to favor natural gas over coal in public policy decisions.

The anti-coal ads showed faces smudged with black makeup.

The company dropped the ads in April.

The new building will contain 120,000 to 130,000 square feet of space and offices for about 300 employees. It will probably have a basement and three floors above ground. It will have workout facilities and a restaurant open to employees, their families and guests.

"The extraction industries have not historically been beneficial to communities," said Price. "We want people to want us in their communities. There are always inconveniences and challenges with infrastructure when there's new drilling activity. But, relatively speaking, the footprint our industry has is extraordinarily light. We're a company that intends to bring a higher quality of life across the board. We'll challenge all of the other operators and all corporate citizens to be as good."