Thu, Jun. 4, 6:32 PM
- Chesapeake Energy (NYSE:CHK) hit a 52-week low today amid a double whammy of negative news concerning the natural gas market.
- The U.S. Energy Information Administration said storage levels grew by 132B cf in the week ended May 15 to 2.2T cf, 51% more than a year ago; the weekly surplus is the largest in 12 years and the second largest in EIA records that date back to 1994.
- Many analysts believe the oversupply eventually will push another fall in gas prices; "The market was ready for a large injection, but it's still extremely bearish," one said.
- Also, the Natural Gas Supply Association said in its 15th annual Summer Outlook assessment of the natural gas market that it expects production to set records and inflict downward pressure on prices compared with summer 2014.
- "Even with record-setting demand expected, production is also projected to set summer records," says Bill Green, NGSA chairman and Devon Energy (NYSE:DVN) VP of downstream marketing.
- ETFs: XLE, VDE, ERX, OIH, ERY, FCG, DIG, GASL, DUG, BGR, IYE, FENY, FIF, PXJ, RYE, FXN, DDG
Thu, Jun. 4, 11:48 AM
- Chesapeake Energy (CHK -3.8%) shares have been whacked by a third YTD as investors punish energy exploration firms that are considered likely to outspend their operating cash flow this year, but StreetAuthority's David Sterman thinks CHK appears poised to buck the consensus forecast this year and at least get to breakeven.
- CHK is "clearly healthier than it was a few years ago and is no longer at risk of a balance sheet blow up," Sterman writes, and its "strong base of real estate, coupled with impressive cost controls, could set the stage for a sharp spike in cash flow if energy prices rise from current levels."
- Sterman spots a subtle turnaround underway - one that appears to have prompted Carl Icahn to keep adding to his CHK position this year - as the company has cut the cost to develop and operate a well by ~30% in the past few years.
Wed, Jun. 3, 3:57 PM
- Chesapeake Energy (CHK -3.6%) tumbles as shares are downgraded to Underweight at Alembic Global Advisors, which notes "onerous" GTP contracts and a poor outlook for renegotiation.
- Alembic says CHK needs gas prices at or near $4/Mcf to tread water, and believes that without a rally in gas prices to $3.75 or higher or a change in the contract terms themselves, CHK is overvalued and will be pushed to a desperate and risky acquisition strategy (Briefing.com).
Fri, May 29, 5:25 PM
- Natural gas production in the Marcellus shale, which has grown over the past decade from near zero to ~20% of U.S. output, may decline for the first time if prices in the basin remain low for much longer, the U.S. Energy Information Administration says.
- "Relatively low gas prices, combined with low oil prices, have slowed drilling in the Marcellus so production from new wells is only offsetting the decline in old wells," EIA says, expecting Marcellus output to remain flat through 2018 before declining ~1%/year during 2019-25.
- Recent data indicates a potential slowdown: The number of rigs in the area has dwindled to its lowest since 2011, and drillers including Chesapeake Energy (NYSE:CHK) and Cabot Oil & Gas (NYSE:COG) have temporarily shut in some production due to weak regional prices.
- An inability to move all the gas out of the Marcellus region has depressed prices there compared with the Gulf coast benchmark, the Henry Hub in Louisiana, making it less attractive for local producers to drill more.
- Other top Marcellus producers include RRC, RDS.A, RDS.B, TLM, APC, ATLS, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Fri, May 15, 3:58 PM
- Chesapeake Energy (CHK -0.7%) must try to settle its dispute with former CEO Aubrey McClendon’s new company through arbitration, even after accusing the ex-CEO of stealing trade secrets, a district court judge rules.
- CHK sued American Energy Partners in February, contending the company was built by McClendon's use of confidential data and maps of oil and gas prospects taken shortly before his ouster from CHK in 2013.
Mon, May 11, 4:59 PM
- Oil production from seven major U.S. shale plays is expected to fall by 86K bbl/day in June, according to the latest report from the Energy Information Administration.
- Oil output at the Eagle Ford shale play in South Texas is forecast to see the biggest decline, down 47K bbl/day, while production at the Bakken shale play, centered in North Dakota, is expected to drop by 31K bbl/day, the report says.
- "The data shows that production in the Bakken and Eagle Ford [plays] peaked in March at 1.33M bbl/day and 1.73M bbl/day, respectively," says WTRG Economics energy economist James Williams.
- Among the top Eagle Ford producers: EOG, BHP, COP, CHK, MRO, APC
- Among the top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Wed, May 6, 8:26 AM
- Chesapeake Energy (NYSE:CHK) +1.5% premarket after beating Q1 earnings estimates but falling well short on revenues, and slightly raising its oil and gas production forecast for the year.
- CHK posted adjusted EBITDA of $928M vs. $1.515B in the year-ago quarter, and cash flow fell to $910M from $1.614B, due mostly to lower realized oil, natural gas and natural gas liquid prices.
- CHK’s Q4 average realized price for oil was $62.57/bbl, down from $85.08 in last year's Q1 and $76.40 in Q4, natural gas prices fell $0.90/MMcf Y/Y and $0.65 Q/Q, and natural gas liquids prices fell $22.46/bbl Y/Y and $6.12 Q/Q.
- CHK says Q1 oil and gas production averaged 686K boe/day, up 14% Y/Y after adjusting for asset sales, and now expects output of 640K-650K boe/day following its earlier forecast of 635K-645K.
- CHK operated 54 rigs on average in the quarter, compared with 67 in Q4 and 60 in the prior-year period, and expects to finish 2015 with 35-45 rigs, down 38% from an average of 64 rigs in 2014 and the lowest total since 2004.
- Says Q1 average production costs totaled $4.84/boe, down 5% Q/Q and 2% lower Y/Y.
- Q1 capital spending rose 8.6% Y/Y to $1.49B; reiterates guidance for $3.5B-$4B in capex for the full year.
Wed, May 6, 7:01 AM
Tue, May 5, 5:30 PM
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Fri, Apr. 24, 3:20 PM
- Chesapeake Energy (CHK -0.2%) will create a $25M compensation fund as part of a settlement of antitrust and racketeering charges brought by the state of Michigan, Reuters reports.
- CHK also agrees to plead no contest to one count each of attempted antitrust violation and false pretenses, charges that the court would dismiss after 11 months if CHK adheres to the settlement terms.
- The antitrust charge brought by the Michigan AG alleged that CHK colluded with a competitor, Encana, to suppress oil and gas land lease prices at a 2010 state land lease auction; Encana agreed to pay $5M in a civil settlement with the state in May 2014.
Wed, Apr. 22, 6:53 PM
- Nomura came out bullish today on the energy E&P sector - issuing Buy ratings for MRO, PXD, EOG, CLR, APC, NFX, RRC, CNQ, CXO, ECA and SU - even as the firm does not foresee a V-shaped rebound in crude oil prices.
- Nomura believes core North American shale plays do not represent the economic marginal cost of supply in the world, which runs counter to commonly held views that largely see shale occupying the high end of the cost curve; thus as oil rebounds, so will investment in the shales, which should support prices, the firm says.
- In such an environment, Nomura says selecting stocks will depend on factors such as ”the reinvestment opportunity set, impact of oilfield technology, continued efficiencies, potential new geologic plays, management acumen and balance sheet strength."
- The firm is Neutral on DVN, HES, MUR, OAS, UPL, WLL, XEC, COG, COP and SWN; it rates NBL, APA, DNR, CHK and CVE as Reduce.
Tue, Apr. 14, 2:49 PM
- Aubrey McClendon's Utica shale company will give 6K acres of Ohio land to Chesapeake Energy (CHK +3.4%) and pay up to $25M in a partial settlement with the company he brought to prominence.
- CHK filed a lawsuit in February alleging McClendon took data from the company when he left in 2013; McClendon’s new American Energy Partners bought huge swaths of acreage in eastern Ohio, where it today remains one of the major acreage holders.
- Energy & Minerals Group, an investment firm headed by John Raymond that has put billions of dollars into American Energy, reached the settlement without informing McClendon of the decision.
Thu, Apr. 9, 7:21 PM
- Radon levels have been rising measurably in Pennsylvania since 2004, when the fracking industry began drilling natural gas wells in the state, according to a new report by the Johns Hopkins Bloomberg School of Public Health.
- The report does not pinpoint the exact cause of rising radon readings or explicitly tie it to any activity, but it says that buildings in counties where natural gas is most actively being extracted have in the past decade had much higher radon measurements than buildings in low-activity areas, where no such discrepancies were found before 2004.
- Pennsylvania has long been known to have some of the highest indoor radon levels in the U.S., but the researchers say fracking of the Marcellus shale formation could exacerbate pathways for radon to enter buildings.
- Top Marcellus Shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Wed, Apr. 1, 9:10 AM
- Chesapeake Energy (NYSE:CHK) +2.4% premarket after Chairman Archie Dunham discloses the purchase of 1M CHK shares worth $13.98M.
- The purchases occurred on March 27 at an average price of $13.9793; Carl Icahn recently bought more CHK shares at an average price of $14.15.
- Dunham is now listed as beneficially owning ~2.635M CHK shares.
Mon, Mar. 23, 6:13 PM
- Chesapeake Energy (NYSE:CHK) is now +3.5% premarket after Carl Icahn disclosed he has increased his active stake in the company to 73M shares, or 10.98%, up from 66M shares (9.98%) in December.
- Southeastern Asset Management maintains the largest holding in CHK, with an 11.1% stake as of Dec. 31.
- During after-hours, CHK also lowered its 2015 capital spending outlook by $500M, citing weak commodity prices.
Mon, Mar. 23, 4:49 PM
- Chesapeake Energy (NYSE:CHK) announces further reductions to its 2015 capital spending budget, now seeing capex of $3.5B-$4B, $500M less than previous guidance of $4B-$4.5B.
- CHK says it plans to operate 25-35 rigs in 2015 vs. last year's average of 64 rigs, and intends to spud and connect to sales a respective 520 and 650 gross operated wells vs. 1,175 and 1,150 wells in 2014.
- As a result, CHK lowers its targeted 2015 production to 231M-236M boe, or 635K-645K boe/day, which represents 1%-3% Y/Y production growth after adjusting for 2014 asset sales.
- CHK -0.2% AH.
Chesapeake Energy Corp is a natural gas and oil exploration and production company. It explores, develops and acquires properties for the production of natural gas and crude oil from underground reservoirs and also provides marketing & midstream services.
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