Chesapeake Energy (CHK -0.9%) is downgraded to Hold at Stifel Nicolaus on valuation, a view that...

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obicat Comments (14)
 
Aubrey McClenden is full of natural gas.
26 Sep 2012, 12:27 PM Reply Like

KimFeil Comments (66)
 
Chesapeake's financials mirror how they conduct themselves in urban drilling. They need to put scrubbers on their open hatch (18"x18") flowback tanks that waft white, steamy, hydrocarbons into the neighborhoods in Arlington TX. The Truman / Cowboy Stadium is a perfect, upcoming example of their disregard for the safety of neaby workers, stadium visitors, renters, and home owners in the area. They fracked 3 wells in Sept. and won't flowback until the pipeline is connected by year end, and so all that stale, festering flowback will vent into my family's airshed and we need them to put scrubbers on those open hatch flowback tanks!
26 Sep 2012, 01:15 PM Reply Like

Factzplz Comments (161)
 
Debt of just $9.5 billion versus roughly $24 billion equity

First major due date is 2015 on debt, $1.5 billion (from memory)

Sales of 10% of assets = $14 billion

Remaining, roughly 90% of assets valued at $13 billion

Roughly, potential, 60 billion BOE valued at $0.21 per barrel

2nd largest gas producer, 11th largest oil producer

And it's downgraded? What is Stifel's agenda? Honesty, it is not.
27 Sep 2012, 02:05 AM Reply Like

wrynot Comments (103)
 
Not sure where you're getting the "major due date" of 2015 from...Forget about Stifel, according to JPM analyst, the company has a FY13 funding gap of $4.7B. Their model also "indicates that CHK has a $3.3 Bn funding gap in 2014 and has no liquidity early in mid 2014 unless it executes additional assets sales or a financing during 1H14." In addition, the lifeline which was thrown to them from Goldman has a rate kicker that I believe takes a big jump at the end of this year. That's not a Stifel/Goldman conspiracy theory, it's just the facts. In any case, this case is not nearly as easy to fix as you make it. They are effectively a distressed seller, the low hanging fruit has been sold, and the bidders all know the score. Maybe NG prices bail them out....maybe.
27 Sep 2012, 10:45 AM Reply Like