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Chesapeake Energy Corporation (CHK)

  • Mar. 26, 2014, 3:19 PM
    • Lower than expected production from Chesapeake Energy’s (CHK -1.1%) Sahara natural gas field in Oklahoma is threatening $880M in loans and notes from Barclays under a pair of agreements that repay the borrowings with future supplies of gas, crude oil and gas byproducts, Bloomberg reports.
    • Output from 3,300 CHK-operated wells in the Sahara field was 12% below projections during six months ending in February, Moody’s says; as a result, the production coverage ratio on the Glenn Pool Oil & Gas Trust five-year loan and 10-year notes declined to 1.18 from 1.29.
    • In December, Moody’s had downgraded ratings on $360M in CHK borrowings backed by Barnett Shale wells in Texas after production growth there slowed to 3.4% in 2013 after growing at double-digit rates in 11 of the prior 12 years.
  • Mar. 24, 2014, 6:45 PM
    • Chesapeake Energy (CHK) stock has dropped ~6% over the last six months vs. the S&P 500's 10% rise, but Chairman Archie Dunham is still a buyer, adding another 54K shares last week totaling ~$1.4M.
    • The former ConocoPhillips chairman has spent $17.4M buying CHK shares in the fewer than two years since he came out of retirement to head CHK's board.
    • Dunham isn’t the only board member buying; CHK directors have spent $27.8M buying shares since June 2012, when the company stripped Aubrey McClendon of his chairmanship and installed Dunham and other new directors; those shares now are worth ~$33.3M.
    • The latest buying suggests confidence in CHK's new leadership and strategy; under CEO Doug Lawler, who joined last June, the company cut capital spending in half in 2013 to $7.2B from $14.1B the previous year with plans to trim another 20% in 2014.
  • Mar. 19, 2014, 10:58 AM
    • Chesapeake Energy (CHK -0.4%) and Encana (ECA -1.3%) appear before a Michigan judge today to answer allegations they criminally conspired to lower land leases in the state.
    • Collaboration between the two companies may have caused lease prices to plummet from $1,510/acre at a May 2010 auction to less than $40/acre at an auction conducted five months later, according to the Michigan AG.
    • ECA has expanded its presence in the region’s Collingwood shale formation, controlling ~429K acres by the end of 2012, while CHK withdrew from the area after investing $400M.
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  • Mar. 17, 2014, 9:14 AM
    • Chesapeake Energy (CHK) +2.6% premarket on news that it has filed with the SEC for a possible spinoff of its oilfield services division.
    • CHK says it intends for the spinoff to be tax-free to its shareholders for U.S. federal income tax purposes.
    • The business, which would be called Seventy Seven Energy after the spinoff, operates the fifth-largest U.S. land-based rig fleet, with 77 walking, pad-capable units; it drills, provides oilfield tools and operates fracking services in the Permian Basin, Eagle Ford, Marcellus and other U.S. shale plays.
  • Mar. 12, 2014, 10:19 AM
    • WSJ examines Chesapeake Energy's (CHK -0.7%) deepening dispute with Pennsylvanians over royalty payments to those with CHK wells on their land.
    • Pennsylvania requires oil and gas drillers pay royalties of at least 12.5%, but lets drillers deduct costs for transporting, processing and marketing - and CHK appears to take a much more aggressive approach to those deductions than other energy companies operating there, including Anadarko (APC) and Statoil (STO).
    • "I'm paying them to take my gas," says one landowner who claims his royalties don't cover the added taxes for owning commercial property.
    • The public outcry has grown so loud that Pennsylvania Gov. Corbett, who has received campaign contributions from the company, wrote an open letter last month asking the state attorney general to investigate.
  • Mar. 11, 2014, 7:32 AM
    • Chesapeake Energy Corporation (CHK) declares $0.0875/share quarterly dividend, in line with previous.
    • Forward yield 1.37%
    • Payable April 30; for shareholders of record April 14; ex-div April 10.
  • Mar. 6, 2014, 3:00 AM
    • Michigan has indicted Chesapeake Energy (CHK) and Encana (ECA) with conspiring to keep down oil and gas lease prices in the state.
    • If found guilty, the companies could face penalties of up to $1M, while individuals could receive prison sentences as well as fines.
    • The charges follow an investigation that was sparked by a Reuters article about how then Chesapeake CEO Aubrey McClendon and other senior executives at the company and at Encana discussed not "bidding each other up."
    • The talks came after Michigan prices soared to as high as $3,000 per acre in mid-2010; they then fell sharply later that year.
    • Encana and Chesapeake still face a separate, federal investigation.
  • Feb. 28, 2014, 9:11 AM
    • Chesapeake Energy (CHK) announces two agreements to sell midstream compression assets for a combined $520M, as it continues to streamline its portfolio towards improving its balance sheet with "minimal impact" on 2014 cash flow guidance.
    • Access Midstream Partners (ACMP) will purchase 103 compression units with a combined capacity of ~200K hp from CHK subsidiary MidCon Compression for $160M, and Exterran Partners (EXLP) will purchase 334 compression units with a combined capacity of ~440K hp for $360M.
    • CHK +0.4% premarket.
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  • Feb. 26, 2014, 5:54 PM
    • Nearly a year after Chesapeake Energy (CHK) ousted Aubrey McClendon after a governance scandal and a liquidity crisis, the former CEO retains financial ties to CHK and is using them to try to change company plans, according to a Reuters report.
    • McClendon is attempting to force CHK to drill 12 multimillion dollar wells in Louisiana's Haynesville Shale even as CHK tries to rein in spending and cut debt to focus on other shales, according to a CHK lawyer.
    • As a legacy of founding CHK, McClendon has personal stakes of 2.5% in nearly all of the tens of thousands of wells the company developed; he is also entitled to a slice of new wells, and he has asked Louisiana regulators to order CHK to follow his drilling plan.
  • Feb. 26, 2014, 12:59 PM
    • While Chesapeake (CHK -7.1%) languishes after reporting its Q4 earnings, natural gas producer EOG Resources (EOG +1.8%) continues to rise after its Q4 results beat expectations.
    • Howard Weil raises its EOG price target to $210 from $191 following strong earnings coupled with encouraging conference call commentary on EOG's domestic onshore portfolio; EOG has exhibited tremendous success in discovering new horizontal oil resource plays and capturing sizable acreage positions, and has improved well performance and reduced costs in other key areas outside of the Eagle Ford (
    • RBC Capital lifts its target to $206 from $182 as EOG increased its Eagle Ford net potential recoverable reserves by 45%; the firm thinks FY 2014 production growth guidance probably was conservative (
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  • Feb. 26, 2014, 8:51 AM
    • Encana (ECA) and Chesapeake Energy (CHK) reportedly are negotiating civil settlements with Michigan to try to end a criminal investigation into whether the companies colluded to keep oil and gas lease prices artificially low in the state.
    • Encana hopes a settlement will be finalized within a few weeks, a lawyer representing ECA said in a recent court hearing, although potential terms of any settlements are unknown.
    • Michigan's AG has an incentive to resolve the matter before a four-year criminal statute of limitations deadline expires later this year.
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  • Feb. 26, 2014, 8:15 AM
    • Chesapeake Energy (CHK) -3.1% premarket after swinging to an unadjusted Q4 loss, hurt by charges related to its efforts to reduce debt and simplify its balance sheet, and adjusted earnings and revenues fall short of expectations.
    • Average daily oil production rose 15% Y/Y but fell 7% Q/Q, average daily natural gas liquids production gained 26% Y/Y and 9% Q/Q, and natural gas production slipped 3% Y/Y and 1% Q/Q; planned reductions were responsible for most of the decrease, but cold weather also had an impact.
    • So far in 2014, CHK has received $209M net proceeds from asset sales and expects to receive $150M-plus related to asset sales in 2012-13; the anticipated sale of its oilfield services business is seen generating another $650M.
    • Proved reserves were 2.7B boe at year-end 2013, a 2% increase from year-end 2012.
    | 1 Comment
  • Feb. 26, 2014, 7:06 AM
    • Chesapeake Energy Corporation (CHK): Q4 EPS of $0.27 misses by $0.12.
    • Revenue of $4.54B (+28.2% Y/Y) misses by $150M.
    • Press Release
  • Feb. 26, 2014, 12:05 AM
  • Feb. 25, 2014, 5:30 PM
  • Feb. 25, 2014, 5:24 PM
    • Chesapeake Energy's (CHK) oilfield services business could be worth $2.5B as the company seeks to either sell or spin off the business, according to a Jefferies analysis.
    • CHK could use a sale of the business to fund most of the E&P's 2014 cash flow deficit, minimizing the need for additional asset sales, particularly among its portfolio of producing oil and natural gas fields, Jefferies says.
    • The firm also forecasts CHK will outspend its cash flows by $800M-$1B in 2014, meaning that any asset monetization could plug a shortfall for the year.
    | 1 Comment
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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.