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

Chesapeake Energy (CHK -0.9%) is downgraded to Hold at Stifel Nicolaus on valuation, a view that remaining asset sales will have less of a positive impact on shares, and that the focus will switch from distressed valuations back to going concern valuations which will make it difficult for CHK to move much higher absent a meaningful gas recovery.
Comments (4)
  • obicat
    , contributor
    Comments (17) | Send Message
     
    Aubrey McClenden is full of natural gas.
    26 Sep 2012, 12:27 PM Reply Like
  • KimFeil
    , contributor
    Comments (79) | Send Message
     
    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
    , contributor
    Comments (229) | Send Message
     
    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
    , contributor
    Comments (257) | Send Message
     
    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
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