History
A Chesapeake-sponsored royalty trust listed in 2011 was delisted to OTC Pink in 2020 and saw its operator pass from Chesapeake to Tapstone to Diversified Energy.
2011: Listing and launch
Chesapeake Granite Wash Trust was set up to hold royalty interests in Oklahoma Granite Wash oil and gas properties. On 9 November 2011 the New York Stock Exchange certified its securities for listing. On 21 November the Trust completed its IPO of 20 million common units, with a further 3 million-unit option for the underwriters. Chesapeake Exploration and its affiliates conveyed perpetual and 20-year term overriding royalty interests in the properties to the Trust. Bank of New York Mellon acted as trustee.
2020-2021: Delisting and a change of operator
The record is quiet for the following eight years. It picks up in February 2020, when the Trust failed to regain compliance within the cure period after its unit price fell below $1.00. Its units were suspended from NYSE trading on 28 February and moved to the OTC Pink market under the same CHKR symbol. In March the exchange filed to remove the securities from listing.
The sponsor then ran into trouble of its own. In Chesapeake Energy's Chapter 11 bankruptcy, the Mid-Continent assets behind the Trust's royalties were sold at auction on 11 December 2020 to Tapstone Energy for $130.45 million. Tapstone took over Chesapeake's duties under the Trust agreements. The Trust also changed auditors, dismissing PwC in April 2021 for Grant Thornton, with no disagreements disclosed.
On 10 December 2021, Diversified Energy acquired Tapstone for $419 million. The Trust-related duties passed to Diversified unchanged, and Diversified may now be deemed beneficial owner of 23.75 million Trust units. In December 2022 Grant Thornton was also dismissed, again with no disagreements disclosed.
As of December 2022, the Trust was a Delaware statutory royalty trust trading on the OTC Pink market, with Diversified Energy standing behind its royalty stream.
Written from the 6 story beats below (2011 to 10 Dec 2021), which come from the company's own announcements and filings.