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Chesapeake (CHK -8.5%) hits lows of the day after admitting its target to reduce debt to $9.5B...

Chesapeake (CHK -8.5%) hits lows of the day after admitting its target to reduce debt to $9.5B or less by year's end may be pushed into 2013 (conference call). Argus oil analyst Phil Weiss says CHK has promised a lot but has yet to deliver much: "They still say they are going to lower debt and they still need to complete asset sales. They just admitted they are having trouble."
Comments (5)
  • paulbip
    , contributor
    Comments (126) | Send Message
     
    So what. It will happen. Long term strong buy. This country will move to energy independence.
    2 Nov 2012, 03:55 PM Reply Like
  • iknow777
    , contributor
    Comments (32) | Send Message
     
    Other oil cos smell blood, not too long before a bidding war erupts. I don't see any of the principles selling???
    2 Nov 2012, 04:48 PM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    Of course CHK is having trouble. CHK's debt problem is not alone. The entire NG industry accumulated a total debts of more than half a trillion dollars as a result of venture into the shale gas plays.

     

    So now CHK wants to sell some assets to reduce debt load. COrrect move. But the problem is a lot of other NG producers are having the same problem. They also need to sell assets to reduce debts.

     

    When every one is selling, who is buying? CHK can not expect to sell their assets as quick as they wanted, and fetch prices as much as they wanted. They have to settle for much than desired.

     

    I have been calling the DOOM of the shale gas industry for a while now. Read here on the looming debt crisis of this industry:

     

    http://seekingalpha.co...

     

    Good luck CHK. I don't short CHK because a much greater opportunity is in long coal mining stocks, and because I expect natural gas price to go up, which is beneficial to CHK. There will be a good time to short CHK and other NG producers in the future.
    2 Nov 2012, 05:22 PM Reply Like
  • Harry Johnson
    , contributor
    Comments (481) | Send Message
     
    Just goes to show that "Full Cost Accounting" and a CEO's Letter To Stockholders can't hide the truth forever.
    3 Nov 2012, 08:22 AM Reply Like
  • CoalHolder
    , contributor
    Comment (1) | Send Message
     
    Mark Anthony, please give us an update on your thesis for coal, natural gas since this article was written. What is your time-frame for NG goin up and coal goin up?
    4 Nov 2012, 06:48 AM Reply Like
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