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Chesapeake Energy Corporation (CHK)

  • Fri, Feb. 27, 10:54 AM
    • Chesapeake Energy (CHK -2.4%) discloses that it expects to write down the value of its oil and gas properties in Q1, with more writedowns in subsequent quarters if prices stay low, according to its latest 10-K filing.
    • "Based on the first-day-of the-month prices we have received over the 11 months ended February 2015, we expect to have a material writedown in the carrying value of our oil and natural gas properties in the first quarter of 2015," CHK says.
  • Thu, Feb. 26, 11:59 AM
    • Chesapeake Energy (CHK -4.1%) is sharply lower for a second straight day following disappointing Q4 earnings, as UBS downgrades shares to Neutral from Buy and cuts its price target to $19 from $24.
    • The view is that CHK offered a "surprisingly weak outlook" for volumes and price realizations, and the company's adjustment to growth for Marcellus curtailments (+3%-5%) does not add up since CHK has little incremental contracted takeaway capacity in the future.
    • Also, Jefferies reiterates its Hold rating but with a reduced stock price of $16, as it guides CHK's headline volumes to fall 7%-8% in 2015.
    • However, Oppenheimer says the two-day decline is an overreaction to overspending; despite the big earnings miss, CHK has "one of the most attractive asset portfolios of any E&P company,” the firm says.
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  • Wed, Feb. 25, 3:28 PM
    • Chesapeake Energy's (CHK -9.5%) team of "value barbarians" has worked to bring the company's costs in line after years of overspending, but CHK will continue to outspend its cash flow in 2015, CEO Doug Lawler said in today's earnings conference call.
    • CHK is forecasting weak pricing for the full year in the Marcellus Shale, and says it started shutting in ~250M cf/day in Marcellus natural gas production in December; CHK plans to run only one drilling rig in the area this year, down from five rigs operating there last year.
    • On CHK's plans for the $5B it made on last year's sale of a big piece of its Marcellus and Utica gas business to Southwestern Energy, Lawler said CHK could use the money to pay down debt, fund its exploration program or acquire new properties or another company.
    • CapitalOne analysts consider Q4 results soft, telling clients that CHK's "weaker than expected liquids pricing plus 2015 guidance for production" likely would drive Wall Street estimates lower.
  • Wed, Feb. 25, 9:24 AM
  • Wed, Feb. 25, 8:18 AM
    • Chesapeake Energy (NYSE:CHK) -4.4% premarket after reporting weaker than expected Q4 earnings and saying it will cut its 2015 spending and rig count in response to lower crude oil prices.
    • CHK says it plans total capital spending of $4B-$4.5B in 2015, 37% lower at the midpoint than the $6.7B spent in 2014, and will operate only 35-45 rigs this year, the lowest number since 2004 and down from an average of 64 rigs in 2014.
    • Even with the cutbacks, CHK forecasts 2015 oil and gas production to grow 3%-5% to 645K-655K boe/day.
    • In Q4, CHK's average production increased 12% Y/Y to 729K boe/day, while revenue rose 11% to $5.05B and driven by 47% revenue growth in its natural gas, oil and natural gas liquid segment; operating expenses fell 4.7% to $4.09B.
  • Wed, Feb. 25, 7:05 AM
    • Chesapeake Energy (NYSE:CHK): Q4 EPS of $0.11 misses by $0.13.
    • Revenue of $5.05B (+11.2% Y/Y) beats by $220M.
    • Shares +0.35% PM.
    • Press Release
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  • Tue, Feb. 24, 5:30 PM
  • Tue, Feb. 17, 11:33 AM
    • Chesapeake Energy (CHK -0.7%) has filed suit alleging that founder and former CEO Aubrey McClendon stole confidential company data during his last months on the job in order to launch his new oil and gas company.
    • CHK claims McClendon asked his assistant to print maps and data about unleased acreage and that McClendon also sent himself blind copies of the same documents at a personal email address during his last months at the company.
    • CHK alleges that the information was used by McClendon and American Energy Partners to acquire drilling rights on land in the Utica Shale formation in four separate transactions.
  • Thu, Feb. 12, 11:33 AM
    • Pennsylvania Gov. Tom Wolf is proposing a new 5% severance tax on natural gas extraction in the state, saying the measure could generate $1B or more.
    • The measure could face some pushback in the state's Republican-controlled legislature, but some kind of fracking tax could pass, as lawmakers from both parties already have proposed taxes from 3.2% to 8%.
    • Like other major natural gas producing states, Pennsylvania already has a severance tax on the value of the gas extracted at the wellhead.
    • 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.
  • Tue, Feb. 10, 6:47 PM
    • Figuring the debt markets are a bit more rational than the equity markets right now, Wunderlich analysts look to the bond market for some clues about energy investing.
    • The firm finds that where Chesapeake Energy's (NYSE:CHK) debt is trading now as "quite refreshing" given the strong balance sheet the company has built, strengthening its conviction that CHK is a Best idea among oil stocks; others holding up well, it says, are financially strong names such as XEC, CXO, EGN, EOG, GPOR, MTZ, NBL, PTEN, PDCE, PXD and ROSE.
    • In other cases, the debt is providing “equity-like returns” for investors who want to move out of stocks and into bonds, with the firm mentioning AREX, BBG, CWEI and NOG.
  • Tue, Jan. 27, 12:58 PM
    • Marathon Oil (MRO -1.3%), Cobalt International Energy (CIE -0.3%) and RSP Permian (RSPP +0.8%) are downgraded to Neutral from Buy at UBS, as the firm cuts its 2015 Brent/WTI crude forecasts to a respective $52.50/bbl and $49/bbl, and lowers 2016 Brent/WTI crude estimates to $67.50 and $62.50.
    • UBS also is cautious on several energy names with large free cash flow deficits, slowing growth profiles and rich relative valuations: COP, DVN, MUR, UPL, RRC, DNR, MHR.
    • The firm's top Buys are APC, CHK and EOG.
  • Mon, Jan. 26, 5:13 PM
    • Chesapeake Energy (NYSE:CHK) agrees to pay $119M under a preliminary settlement with Oklahoma mineral rights owners who accused the company of improper royalty payments dating back to 2004.
    • Landowners accused CHK of improperly withholding royalty money and charging them for the costs of processing and transporting gas; the class action lawsuit affects more than 11,800 wells in Oklahoma.
    • CHK has faced similar lawsuits in Pennsylvania and other places where it operates.
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  • Fri, Jan. 23, 3:44 PM
    • Chesapeake Energy (CHK +0.3%) is upgraded to Outperform from Neutral with a $24 price target, up from $21, at Credit Suisse, which cites attractive relative valuation, a much improved balance sheet that has investment grade qualities, and the firm's expectation that CHK could utilize its newly found financial strength to make a counter-cyclical M&A transaction to upgrade its asset base.
    • The firm says CHK's increase in its net asset value reflects the accretive nature of the recent Marcellus asset sale to Southwestern Energy, which was “the key transformative deal" for CHK and has the potential to “meaningfully enhance the company’s credit" and leaves CHK’s balance sheet as one of the strongest in the peer group.
    • Credit Suisse's upgrade comes even as the firm downgrades several energy names, including Exxon and Chevron.
  • Tue, Jan. 20, 11:33 AM
    • Chesapeake Energy (CHK +1.9%) moves higher as a report speculates that the company could be a potential acquisition target of India's ONGC.
    • India's government has directed state-run ONGC to make some acquisitions to hedge themselves against higher energy prices in the future, and reportedly considers CHK a strong strategic target, given its recent sales, balance sheet and diversification through two commodities.
    • The report says ONGC could already be in talks with a North American gas and oil company, with CHK believed to be the target.
  • Wed, Jan. 14, 3:49 PM
    • "If you think the long-term price of oil is going to be $45 per barrel, there's basically nothing in this sector it makes any sense to own," Oakmark Funds' Bill Nygren tells CNBC, but he quickly adds he doesn't expect that. Checking futures out five years, the price is $70 per barrel, and a look at cost of production - near $70 - means production is going to be shutting down at current prices.
    • One energy sector pick is Chesapeake Energy (CHK +5%). There's a stale perception of the stock, says Nygren, of a company designed to grow the top line as much as possible. But new management is laser-focused on maximizing rate of return, and their work at deleveraging the balance sheet is now allowing buybacks.
    • Nygren's also liking General Electric (GE -0.4%), noting its underperformance - nearly 2000 basis points over the past year - and discounted valuation means the company only has to be average for the stock to go up. He also takes note of the new CFO as changing the focus to cash returns rather than reported earnings.
  • Wed, Jan. 14, 2:35 PM
    • Barclays downgrades the large-cap E&P sector to Negative from Neutral and the small- and mid-cap E&P group to Negative from Positive, arguing that downside risk outweigh potential gains even if oil prices recover.
    • Equity investors are pricing in WTI crude assumptions of close to $75/bbl in 2016 compared to current strip prices of ~$57, Barclays says, also noting that an abundance of relatively cheap oil supply from U.S. producers could further delay a price recovery.
    • Among specific names, the firm downgrades CHK, SD, REN and HK to Underweight; DVN, CLR, KOS, MRO, RSPP and WLL are cut to equal weight.
    • At the same time, Barclays picked a few favorites, upgrading Range Resources (NYSE:RRC) to Overweight from Equal Weight, and maintained Overweight ratings on large-cap E&P companies CNQ, EOG and NBL; among small- and mid-cap E&P names, the firm favors AR, CXO and XEC.
    • ETFs: XOP, IEO, PXE
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Company Description
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.