Chesapeake Energy CorporationNYSE
Chesapeake Energy: What To Expect In 2016
Richard Zeits • 68 Comments
Richard Zeits • 68 Comments
Chesapeake Energy Haunted By A Bad Deal, Bankruptcy Looms?
Daniel R Moore • 169 Comments
Daniel R Moore • 169 Comments
Tue, Dec. 6, 5:41 PM
- Junk-rated energy companies are rushing to the U.S. bond market at the fastest pace in nearly two years, Reuters reports, in a bid to refinance debt following a sharp rally in spreads over the past week.
- Parsley Energy (NYSE:PE) and Chesapeake Energy (NYSE:CHK) are pricing deals today (I, II) and follow a bond from Cheniere Energy (NYSEMKT:LNG) yesterday which was increased to $1.5B from $1B on strong demand; Rowan (NYSE:RDC) and Matador Resources (NYSE:MTDR) also are marketing deals (I, II).
- Since OPEC's Nov. 30 production cut announcement, junk-rated energy bond spreads have tightened by 71 bpa to 483 bpa over U.S. Treasurys as of Monday's close, marking the lowest level since October 2014.
- The five borrowers coming to market this week could sell $3.4B of junk-rated bonds, which would mark the highest weekly volume for the energy sector since March 2015.
Tue, Dec. 6, 10:20 AM
- Chesapeake Energy (CHK -0.2%) announces a new debt issuance and tender offer, which RBC analysts say should further improve the company’s debt maturity profile and financial liquidity.
- CHK announced a $750M senior notes issuance due 2025 and a $1.2B tender offer for several tranches of senior notes due through 2023, with the tender offer likely to be funded initially with the notes issuance and revolver availability; RBC says the Haynesville asset sale should reduce revolver outstandings upon the deal's close in Q1 2017.
- This is CHK's third tender/exchange offer in the last 12 months.
Mon, Dec. 5, 7:38 AM
- Chesapeake Energy (NYSE:CHK) +5.4% premarket after announcing an agreement to sell part of its Haynesville Shale acreage in Louisiana for $450M.
- The sale includes ~78K net acres, 40K which the company considers core acreage, as well as 250 wells currently producing 30M cf/day of gas net to CHK.
- CHK says it also plans to sell ~50K net acres in the Haynesville Shale; the company expects to close both sales in Q1 2017.
- With the two sales, CHK says it would reach ~$2B in gross proceeds from divestitures either signed or closed in 2016.
Wed, Nov. 30, 2:30 PM
- Oil and gas names continue to surge following the news that OPEC will cut production.
- Among the 36 energy stocks in the benchmark SPDR Energy ETF, 13 are up by at least 10%: MRO +21.6%, RIG +19.6%, MUR +15.7%, DVN +15.2%, NFX +15.2%, HES +14.8%, APC +13.6%, HAL +13.6%, CXO +11.3%, XEC +10.9%, EOG +10.5%, COP +10.4%, CHK +10%.
- Continental Resources (CLR +23.6%) soars to a 52-week high, making founder and CEO Harold Hamm, already the wealthiest U.S. energy billionaire, another $3B richer.
- Offshore drillers are broadly sporting double-digit gains: ESV +24.8%, ATW +20.6%, RIGP +18.7%, SDRL +16.5%, DO +15.7%, RDC +15%.
- "For all E&P stocks, this is a bullish call for sure, because price is directly correlated with cash flow," says Luana Siegfried, energy equity research associate at Raymond James, which sees U.S. crude reaching $60/bbl by year-end.
- MarketWatch's Philip van Doorn writes that pending earnings estimate increases from analysts ought to set a floor under the energy sector and support even higher prices for oil stocks.
Wed, Nov. 30, 9:50 AM
- Shares of energy companies surge at the open, as hopes for an OPEC deal to cut production send crude oil futures soaring.
- Reports say Saudi Arabia is prepared to accept "a big hit" to production and agree to Iran freezing output at pre-sanctions levels.
- In early trading: XOM +2.2%, CVX +2.3%, RDS.A +3.6%, BP +3.4%, TOT +1.7%, STO +5.1%, PBR +8.1%, COP +7.2%, MRO +12.1%, APC +8%, DVN +12.7%, HES +9.5%, ENB +2.1%, PSX +0.8%, SLB +4.2%, HAL +8.3%, BHI +4.3%, KMI +4.8%, EPD +2.7%, ETP +3.8%, WMB +5.4%, RIG +11.3%, SE +2.2%, CHK +9.4%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, PXI, FIF, PXJ, RYE, NDP, GUSH, PSCE, DRIP, DDG, FXN, CRAK
Tue, Nov. 29, 10:20 AM
- Crude oil continues to slide - WTI now -3.8% at $45.27/bbl, and Brent -3.8% at $46.40/bbl - dragging oil and gas equities (XLE -2.1%) down with it.
- Iran's oil minister says he is not prepared to reduce supply, and Saudi Arabia says it would not participate in a production deal without Iran and Iraq.
- Reuters reports that Iran has written to OPEC saying Saudi Arabia needs to cut oil output to 9.5M bbl/day; Saudi has said it was prepared to reduce its production only by 500K bbl/day from current levels of 10.5M.
- In early trading: XOM -1%, CVX -1.7%, RDS.A -1.4%, BP -1%, TOT -0.3%, STO -1.8%, PBR -3.7%, COP -2.9%, MRO -4%, APC -2.8%, DVN -2.7%, HES -3.6%, ENB -2.3%, PSX -1.2%, MPC -0.8%, SLB -2.2%, HAL -2.3%, BHI -2.1%, KMI -1.4%, EPD -2%, ETP -2.2%, WMB -2.4%, SE -2.3%, CHK -2.6%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, FIF, PXJ, RYE, NDP, GUSH, DRIP, DDG, FXN, CRAK
Thu, Nov. 17, 5:39 PM
- Chesapeake Energy (NYSE:CHK) agrees to sell a package of assets in the Utica Shale play to Ohio-based Geopetro for an undisclosed sum, in CHK's latest move to focus its broad U.S. onshore portfolio.
- The assets include 27 wells and 37K net acres in northeast Ohio and western Pennsylvania; most of the wells are natural gas producers while one is producing oil.
- CHK continues to execute asset sales as it reduces its debt; it recently sold 882K net acres and 5,600 wells in the Devonian Shale of West Virginia and Kentucky to an undisclosed buyer.
Tue, Nov. 8, 11:13 AM
- Oklahoma’s oil and gas regulator says it plans to shut some disposal wells and reduce the volume of others in response to Sunday’s earthquake near the Cushing oil hub.
- The Oklahoma Corporation Commission says its plan covers 700 sq. miles but does not say how many wells were affected; when a quake of similar magnitude hit the state in September, the agency ordered 37 wells shut over a 500 sq. mile area.
- Pipeline operator Magellan Midstream Partners (NYSE:MMP) quickly resumed normal operations at Cushing following a controlled shutdown of its assets after the quake, while Kinder Morgan (NYSE:KMI) and Enbridge (NYSE:ENB) said their facilities were not affected.
- Oklahoma's top oil and gas producers include CLR, CHK, DVN, MRO, NFX, XEC and SD.
Mon, Nov. 7, 4:57 PM
- Natural gas production from Ohio, home to the Utica shale formation, jumped 13% Y/Y in August even as output fell across the rest of the U.S., including the neighboring Marcellus play in Pennsylvania.
- Producers are doubling down on Ohio amid speculation that gas flows from the Utica will eventually rival output from the Marcellus, the biggest U.S. shale reservoir; Ohio accounted for ~5% of U.S. gas supply in August, up from less than 2% for the same period in 2014.
- Chesapeake Energy (NYSE:CHK), Rice Energy (NYSE:RICE) and Gulfport Energy (NASDAQ:GPOR) drilled most of the new wells in the state, according to Bloomberg.
Fri, Nov. 4, 2:44 PM
- Chesapeake Energy (CHK -1.5%) can double from current levels to $11, SunTrust analysts say, following the company's strong Q3 results that featured higher than expected production and lower costs.
- SunTrust says CHK has made substantial financial progress in the past year, with the company shoring up its liquidity and leverage, and materially simplifying its balance sheet.
- The firm believes CHK's leverage is still higher than the peer group average, and it forecasts a $300M cash flow outspend next year, but continued operational efficiencies and lower well costs should further boost returns and likely push cash flow positive in 2018.
Fri, Nov. 4, 8:10 AM
- Chesapeake Energy (NYSE:CHK) discloses receipt of a voluntary document request from the SEC seeking information on its accounting methodology for the acquisition and classification of oil and natural gas properties.
- CHK received a subpoena from the Department of Justice related to the same issue, the company said in September.
- CHK also says a class action lawsuit was filed last month in a U.S. District Court alleging violations of securities laws for purported misstatements in its public filings.
Thu, Nov. 3, 9:15 AM
Thu, Nov. 3, 8:28 AM
- Chesapeake Energy (NYSE:CHK) +5.6% premarket after reporting a surprise adjusted quarterly profit for the first time in six quarters, thanks to lower costs that helped offset a drop in revenue on reduced production and low commodities prices.
- CHK's Q3 net loss narrowed to $1.2B, or $1.54/share, from $4.7B, or $7.08/share, in the year-ago quarter; excluding certain non-recurring items, adjusted EPS of $0.09 came in ahead of analyst expectations.
- Q3 total revenue fell by a third Y/Y to $2.28B, with oil and gas revenue of $1.18B beating the $1.02B consensus, and marketing and other revenue of $1.1B missed expectations of $1.23B.
- Q3 production sank to 638.1K boe/day from 667K boe/day a year ago; Q3 capex was $412M, down roughly a third from $623M in the year-earlier quarter.
- CHK expects its exit rate production to grow significantly over the next two years, projecting an exit-to-exit increase in total production from Q4 2016 to Q4 2017 of ~7%, adjusted for asset sales, and a ~15% increase from Q4 2017 to Q4 2018.
Thu, Nov. 3, 7:11 AM
Wed, Nov. 2, 5:30 PM
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Tue, Oct. 25, 3:57 PM
- RBC Capital is the latest to jump on the Chesapeake Energy (CHK -3.7%) bandwagon, upgrading shares to Sector Perform from Underperform with an $8 price target, raised from $7, reflecting the company's lower cost structure and improved margin outlook over the next few years.
- CHK believes its EBITDA will double by 2018 while increasing liquids contribution to more than 30% of production; RBC thinks the outlook is achievable and competitive with top-tier operators, but debt reduction will require strong asset sale execution.
- The firm sees potential upcoming catalysts including oil growth from Powder River assets, the Mid-Con opportunity, well results from natural gas assets and restructuring of the Eagle ford midstream deal.
- Shares are sharply lower today despite the upgrade, the most recent of several analyst upgrades and stock price target increases.