|
|
Browse by Tags
All Tags » CHK (RSS)
-
Mike Havrilla submits:As a follow-up to the top rated companies highlighted from the ETF Innovators ((ETFI)) healthcare and transport indexes, below are some top rated companies from other sectors and industry groups.
From the Global Tobacco Index, Altria Group (MO) is a top rated stock with a dividend yield near 8% which is set to acquire smokeless tobacco maker UST Inc. (UST) early next year and is poised to capitalize on a strong U.S. Dollar (UUP) compared to the international operations of Philip Morris (PM). Complete Story »
|
-
 Kurt Wulff (McDep Associates) submits: B uy-recommended Cimarex Energy (XEC) is taking advantage of its operating and financial strength to acquire promising shale gas acreage in western Oklahoma from Chesapeake Energy (CHK) for $180 million. The acquired leases cover most of the same land where XEC has already participated in 18 of the 23 industry wells drilled to tap natural gas in the Woodford Shale formation. The low-debt, cash-rich buyer will use internal funds to acquire an asset from a cash-strapped seller at an opportune time. Cimarex may ultimately spend $2 billion in the Woodford area to develop more than a trillion cubic feet of reserves over the next decade. Meanwhile XEC is reducing the number of drilling rigs it employs currently in order to keep spending within cash flow generation. Some well projects in the Texas Panhandle and in West Texas would be marginal at $6 a million btu, should natural gas price drop to that level. Complete Story »
|
-
-
Jeff Wilson submits:If you’ve been paying attention, you will notice a major change in the Pickens Plan. The original plan was this: Use wind energy to replace the use of natural gas in generating electricity, and take the saved natural gas and use it in compressed natural gas cars, like the Honda GX (NYSE: HMC), to replace gasoline. This shift would greatly reduce the amount of oil that we need to import. T. Boone Pickens said that this would get us started toward energy independence while we are waiting for the development of other technologies like plug-in electric cars, which he described as ‘not quite there yet’. Complete Story »
|
-
Prudent Speculations submits:Earlier this week Chesapeake Energy (CHK) announced that the company was proceeding with the sale of a 32.5% interest in its Marcellus Shale development to StatoilHydro (STO), the Norwegian oil giant. In return for its new interest in one of North America’s more interesting shale plays, StatoilHydro is paying $1.25B plus the guarantee that it will foot 75% of the expected drilling costs through 2012 for an additional $2.13B. Another Norwegian company, Norse Energy has already built up a sizeable acreage position in the Marcellus Shale totaling somewhere around 175,000 acres. Given the interconnectedness of Norway it would not surprise me at all if the executives at Norse Energy and StatoilHydro had at the very least talked over the opportunities that the Marcellus Shale offers to natural gas prospectors. Nevertheless, the emergence of StatoilHydro as a passive foreign partner should serve as a reassurance to domestic gas produces in search of cash as the Norwegian giant is more likely than not only the beginning of wave of large foreign multinationals looking to diversify their production base via the acquisition of U.S. oil and natural gas producers in relatively low cost venues. Complete Story »
|
-
- The Money: $3.375 billion: $1.25 billion cash upfront; $2.125 billion in drilling costs over 2009-2012.
- The Position: Chesapeake Energy (CHK) gives up 32.5% of their Marcellus position (or 600,000 acres of their 1.8 million acre position). The company had been looking to farm out 25% of their leading position in the play but at the present time I think bigger will be viewed as better.
- This is a 1/3 (just under) for 3/4s Carry. The future drilling costs are a 3/4 carry for Chesapeake which will significantly reduce CHK’s need for capital in the play during the play’s initial, most costly phase of development.
- Closing by year end. CHK has been promising that some form of Marcellus deal gets done this year.
- Valuation Implication: This values the entire Marcellus play at $10.4 B ($3.375 B/32.5% interest). CHK’s Enterprise value (Mkt cap + debt) was $26.1 B as of yesterday’s close. So for $16 billion you get the #2 producer in the Barnett and Fayetteville Shales, and the #1 player in the Haynesville Shale not to mention the rest CHK’s holdings. When you consider they have not booked any reserves in the Marcellus yet the market is valuing them at substantial discount to on a $/ Mcfe basis.
- STO Put Reserve Numbers On The Deal Providing A Little Outside Confirmation.
- Statoil (STO) said they are acquiring future recoverable reserves of 2.5 to 3.0 billion barrels of oil equivalent. That’s equal to 15 to 18 Tcfe to their interest.
- For CHK’s 62.5% interest that comes to 28 to 34 Tcfe. Put that up against CHK’s 3Q booked reserves for the entire company of 12.1 Tcfe.
- STO Even Provided Some Long Range Snap Shots on Production Growth. One of the benefits of dealing with resource (manufacturing) plays is their predictability.
- STO made the comment they see production to their interest of "at least" 50,000 Boepd by 2012 and "at least" 200,000 Boepd by 2020.
- Putting that into gas language and adjusting to the higher working interest percentage for CHK that comes to production net to CHK of just under 0.6 Bcfepd in 2012 and 2.3 Bcfepd by 2020.
- Compare that to CHK’s 3Q08 production of 2.3 Bcfepd.
- CHK To Keep Growing Marcellus Acreage. CHK will keep adding and STO will have the right to participate in the new leases at the same 32.5% working interest.
- Cause For Pause. There’s always a catch and though this may be a harmless one analysts will probably be dubious (it’s in their nature) of the statement that "CHK and STO have agreed to enter in an international strategic allocation to jointly explore unconventional natural gas opportunities worldwide". The CHK story is an onshore, U.S. only natural gas story and the last thing people want to see them do is go on safari looking for more gas.
- In A Nutshell… I think its a good deal for the above reasons and because they needed to do it, because they didn’t do it with BP (always good to diversify your deal basket), and because it provides another opportunity for them to yell, "look at the implied valuations man, we’re not crazy, another company sees it, why don’t you???!!!"
- Likely Positive Implications for: [[XCO]], [[ATN]], [[PVA]], and [[RRC]].
Complete Story »
|
-
C.S. Jefferson submits: Congratulations, Barack Obama on your Presidential victory. Thank you for restoring our trust and belief that votes do matter. Democracy is alive and well. Having said that, put the party hats away and the champagne on ice, because America is in for a sober awakening. It is clear that the incoming Obama administration must not wait until the traditional inaugural swearing into office to put a mandate forward. Our country’s economy cannot afford the luxury of a post-election honeymoon period and extended jubilance or celebratory cheer. Complete Story »
|
-
 Excerpt from Raymond James strategist Jeffrey Saut's latest essay: Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (November 3rd): ...[W]e have been recommending various attractively yielding convertible preferreds that play to companies with clean balance sheets and decent fundamentals. Additionally, last week we “dialed in” the trading account (for the first time in weeks) by recommending a number of exchange-traded funds [ETFs] and in some cases employing a hedging strategy to reduce trading risk.
Complete Story »
|
-
Chesapeake Energy Corporation (CHK)
Q3 2008 Earnings Conference Call Complete Story »
|
-
Ockham Research submits: Energy stocks have retreated quite a bit since the commodity bubble popped in mid-summer. The energy sector as a whole is down about 40% during this time frame while the S&P 500 is down a relatively moderate—in comparison—23%. Chesapeake Energy (CHK) has been particularly hammered in recent months, down a whopping 62% from its peak. Chesapeake is the nation’s largest natural gas producer and its stock has suffered from plunging gas prices as well as a debt load that is worrisome in this credit environment. There was also the embarrassing news story of the company’s CEO receiving a margin call as a result of the stock’s decline. Well, Chesapeake reported earnings yesterday and while the earnings were nothing spectacular they do give additional insights into the health of the company. Complete Story »
|
-
J.J. Rendina submits:As Chesapeake Energy (CHK) seeks to shore up its cash position by taking on a JV partner for its Marcellus shale, a strange, but true back story may be hurting the company's chances. The consummate land man, Aubrey McClendon, might just have outdone himself. The company's latest investor presentation gives an implied value of $7,500/acre for its 1.8 mm acres of Marcellus leasehold (US $13.5B). So, a 25% share would be worth $3.4B. On the basis of the previous JV deals, a portion of this amount would be in cash with the balance delivered over time in the form of a drilling cost carry. According to the presentation's tables, these JV proceeds combined with the proceeds from sales of some producing properties in Oklahoma and South Texas are projected to raise $2.5B to $3.0B. So, $1.7B from the Marcellus would seem reasonable and, thus, a critical piece of the 12/31/08 Ending Cash forecast of $3.5B. Complete Story »
|
-
J.J. Rendina submits:As Chesapeake Energy (CHK) seeks to shore up its cash position by taking on a JV partner for its Marcellus shale, a strange, but true back story may be hurting the company's chances. The consummate land man, Aubrey McClendon, might just have outdone himself. The company's latest investor presentation gives an implied value of $7,500/acre for its 1.8 mm acres of Marcellus leasehold (US $13.5B). So, a 25% share would be worth $3.4B. On the basis of the previous JV deals, a portion of this amount would be in cash with the balance delivered over time in the form of a drilling cost carry. According to the presentation's tables, these JV proceeds combined with the proceeds from sales of some producing properties in Oklahoma and South Texas are projected to raise $2.5B to $3.0B. So, $1.7B from the Marcellus would seem reasonable and, thus, a critical piece of the 12/31/08 Ending Cash forecast of $3.5B. Complete Story »
|
-
Market Folly submits:In what seems like an endless cycle of hedge fund withdrawals and redemptions, it should come as no surprise that investors in Boone Pickens' BP Capital hedge funds are seeking their money back. Let the redemption bloodbath begin. In addition, it seems as if BP Capital is partly responsible for the massive sell-off in energy equities.
We first got word of Boone's poor performance towards the end of September, when we noted that his equities fund was -30% through August, and his commodities fund was -84% through the same period. In his recent appearance on "60 Minutes," Boone noted that he and his firm had lost around $2 billion since the peak in June. In addition, in a recent Wall Street Journal article, they note that nearly 50% of investors are withdrawing their money from the fund, which has seen losses of nearly 60% now. They also noted that Boone moved nearly everything into cash a few weeks ago, to protect the funds from further downside risk. Complete Story »
|
-
 Davy Bui submits: The financial media have been all over the story of CEO Aubrey McClendon being margined out of the vast majority of his [[CHK]] stake at massive losses. Over the last few months, investors have watched CHK go from over $70 per share to near $10 (currently @ $20) which is even more drastic than the underlying commodity and other E&P companies. Along with McClendon’s forced selling, concerns about Chesapeake’s exposure to dysfunctional capital markets drove CHK lower than its peers. With that background, I reviewed CHK’s presentation from its recent investor/analyst meeting last week. Specifically, I was keenly interested in CHK’s financial position, its ability to complete further asset monetization deals and its general operational outlook given the financial turmoil combined with the drop-off in nat gas price. While I may go back and listen to the day-long webcast later, here are some key takeaways from the accompanying presentation: Complete Story »
|
-
Chesapeake Energy Corporation (CHK)
Q3 2008 Business Update Call Complete Story »
|
|
|
|