Today, after much huffing-and-puffing, many press releases, and much pulling-and-pushing by both Chesapeake management and its fans here and elsewhere, the stock stands at about $23.
Even word that the company is partnering with KKR concerning royalty interests isn't moving the needle.
Maybe someone remembers that old adage - there is no partner so limited as a limited partner.
Faced with a continuing natural gas glut, CEO Aubrey McClendon has been selling leases and drilling his remaining oil stakes as fast as ever he can, all the while keeping up a string of positive announcements and aiming jibes at his critics.
But now, criticism is starting to mount:
- Chesapeake is coming under increasing criticism for how it gets its gas. A New York judge recently gave localities there control over fracking
- Chesapeake's future production estimates are being questioned. The Department of Energy recently dropped its estimates on reserves in the east coast's Marcellus Shale, an area pioneered by Chesapeake
- Accounting has even been questioned. Petroleum engineer Art Berman says shale gas producers are underestimating costs).
The KKR deal reminds me a lot of those ads for JG Wentworth, the ones with happy young people screaming out their windows that they want their money NOW. (Never mind that most people with structured settlements aren't young, handsome or happy.)
It's the same deal here, except for people who have royalty interests in future oil and gas production. You want your money now? Chesapeake will look into the claims, come up with a factored price, the two partners will send out money and (of course) profit on the back end.
There are still people pounding the table for the stock. Canaccord says the company's capital productivity is "20% better" than the sector as a whole and that the company is redirecting its drilling activitiy to liquids. It has a $37 price target.
Devin Shire, a CHK shareholder, headlined his recent piece "Production Growth And Cash Flow Growth Ahead" but even he admitted, at the end of the piece that "I'm not sure anyone needs to rush out and buy Chesapeake today."
Neither am I. Chesapeake still faces low natural gas prices, high economic and political risks in fracking, plus a continuing need to raise capital. (Tweets won't make the risk go away.)
If you're betting on Chesapeake, you're betting that Aubrey McClendon is the greatest wildcatter since H.L. Hunt sat down at a poker table. Despite the Great Recession, I don't think the 1930s have come back. There are lots of better places to play with your energy investment money.