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Chesapeake Energy Corporation (CHK)

  • Today, 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.
  • Fri, Mar. 20, 5:20 PM
    • Despite the steep drop in energy prices, most investment-grade E&P companies face little risk of default because they are well-managed, diversified and have plenty of cash, according to analyst Philip Adams of bond rating firm Gimme Credit.
    • Companies Adams believes are in strong positions - with a starting cash position greater than his estimated free cash flow deficit - include Suncor (NYSE:SU), Chesapeake Energy (NYSE:CHK), ConocoPhillips (NYSE:COP), Hess (NYSE:HES) and Anadarko Petroleum (NYSE:APC).
    • Adams is “throwing in the towel" on only one company: WPX Energy (NYSE:WPX).
    • He expects energy prices will rise this year due to less drilling, disruptions in countries such as Libya and new regulations that curtail fracking, but warns that the glut will worsen if Iran rejoins the market.
  • Thu, Mar. 19, 9:09 AM
    • Chesapeake Energy (NYSE:CHK-3.4% premarket after Sterne Agee downgrades shares to Underperform from Neutral with a $9 price target, citing downside risk to its $2.70/Mcf 2015 Henry Hub natural gas forecast.
    • Sterne says it supports CHK's moves to remove balance sheet opacity, but financing decisions from the previous management are driving sub-optimal capital allocation amid depressed commodity prices.
    • The firm says it is late on the downgrade call given CHK's underperformance YTD, but believes shares remain overvalued as concerns on capital allocation and overall asset quality linger.
  • Tue, Mar. 17, 7:40 PM
    • Crude oil production at three major U.S. shale oil fields - the Eagle Ford in south Texas, the Bakken in North Dakota, and the Niobrara in Colorado and adjacent states - is projected to fall this month for the first time in six years, the Energy Information Administration says.
    • Net production from the three fields is expected to drop by a combined 24K bbl/day, but overall losses likely will be masked by production gains in the Permian Basin in west Texas and other regions.
    • It is one of the first signs that idling hundreds of drilling rigs and billions of dollars in corporate cutbacks are starting to affect the U.S. oil patch, but it also shows that drilling technology and techniques have advanced to the point that productivity gains may be negligible in some shale plays.
    • Top Eagle Ford producers: EOG, BHP, COP, CHK, MRO, APC
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    • Top Niobrara producers: NBL, APC, ECA, CHK, EOG, WPX
  • Tue, Mar. 17, 7:12 PM
    • Most of the top 15 shale oil producers in the U.S. are heavily concentrated in basins expected by NavPort to be severely affected by the decline in prices, with one major exception: ConocoPhillips (NYSE:COP).
    • COP has the lowest well completion concentration in basins expected to suffer the greatest production cuts this year, implying less disruption than other shale competitors, according to NavPort, which collates oil well and rig data using regulatory reports.
    • All 14 of the other top producers tracked by NavPort have at least two-thirds of well completion concentrated in the basins rated with "strong" or "severe" exposure: CHK, APC, EOG, DVN, SWN, MRO, APA, SD, XOM, CLR, PXD, NBL, BHP, WLL.
    • Operators concentrated in basins that have been less severely affected - such as the Woodford, Utica and Haynesville basins - should enjoy more production than their peers through a higher volume of well completions, NavPort says.
    • The study sees the Mississippi Lime, Granite Wash, Bakken and Permian basins suffering at least a 40% Y/Y reduction in drilling.
  • Fri, Mar. 13, 9:19 AM
    • Exxon Mobil (NYSE:XOM) releases a statement suggesting ways the U.S. government should adjust its energy policies, including allowing U.S. exports of oil and natural gas, approving the Keystone XL pipeline, and making the regulatory process less burdensome and more transparent.
    • "The energy industry has been an economic engine for the entire nation at a time of recession, slow growth, and falling labor participation rates,” CEO Rex Tillerson says.
    • Also, several CEOs of U.S. drilling companies, including ConocoPhillips' (NYSE:COP) Ryan Lance, Marathon Oil's (NYSE:MRO) Lee Tillman, Chesapeake Energy's (NYSE:CHK) Doug Lawler and Occidental Petroleum's (NYSE:OXY) Steve Chazen, reportedly were in D.C. this week trying to persuade White House officials and lawmakers to lift the 40-year ban on U.S. oil exports.
  • Tue, Mar. 10, 11:15 AM
    • Chesapeake Energy (CHK -1.7%) is reiterated with a Buy rating and $24 price target at Wunderlich, which says the stock is at a 52-week low for what it believes are unfair reasons.
    • The firm notes the concern about CHK remains its balance sheet despite asset sales and simplification that have put the company in a great position, and while CHK has an outspend for 2015, it should be easily funded by the $4B in cash currently on the books.
    • Wunderlich also believes CHK's potential to make acquisitions in a depressed market and a $1B share repurchase program authorized late last year provide multiple avenues for CHK to add value, and now sees significant opportunity for investors at a compelling price.
  • Thu, Mar. 5, 4:49 PM
    • Chesapeake Energy (NYSE:CHK) declares $0.0875/share quarterly dividend, in line with previous.
    • Forward yield 2.2%
    • Payable April 30; for shareholders of record April 15; ex-div April 13.
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  • 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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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.