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Chesapeake Energy Corporation (CHK)

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  • 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.
    | Feb. 25, 2014, 5:24 PM | 1 Comment
  • Feb. 24, 2014, 2:20 AM
    • Chesapeake Energy (CHK) is pursuing strategic alternatives for its oilfield services division, including selling the unit or spinning it off to the company's shareholders.
    • Chesapeake Oilfield Services (COS) generated revenue of $2.2B in 2013; its service offerings include drilling, hydraulic fracturing, oilfield rentals, rig relocation, and fluid handling and disposal.
    • The news follows speculation last week that 10%-owner Carl Icahn is seeking a cash bid of up to $40 a share for Chesapeake, whose shares closed at $26.57 on Friday to give it a market cap of $17.67B. (PR)
    | Feb. 24, 2014, 2:20 AM | 2 Comments
  • Feb. 21, 2014, 5:27 PM
    • Rising natural gas prices could help Chesapeake Energy (CHK) profit off a plan to revive the maligned Haynesville shale play, where it gambled billions of dollars six years ago, and the 7-9 rigs CHK expects to deploy to the reservoir this year could boost daily rates for U.S. land drilling companies, analysts say.
    • CHK's plan would increase the number of Haynesville rigs 25% to ~50 by the end of this year, according to an analysis by Raymond James - not like the old days, but renewed gas drilling could drive up margins for U.S. rig contractors by spreading out demand to other regions in the country.
    | Feb. 21, 2014, 5:27 PM | 2 Comments
  • Feb. 14, 2014, 5:36 PM
    • The Pennsylvania governor says he is launching an investigation of Chesapeake Energy's  (CHK) Marcellus shale royalty payment practices, adding to scrutiny of the company for allegedly defrauding landowners out of payments owed to them from gas production in the state.
    • State law in Pennsylvania requires oil and gas producers to pay a minimum of 12.5% in royalties to owners of land where drilling takes place; companies are allowed to charge "post-production costs" for the transportation or processing of gas, but CHK invokes that right more than any other company, which Corbett says has led to the "erosion of trust and goodwill of the natural gas industry."
    | Feb. 14, 2014, 5:36 PM | 23 Comments
  • Feb. 11, 2014, 2:38 PM
    • Carl Icahn owns a ~10% stake in Chesapeake Energy (CHK +0.2%) and is seeking a cash bid for the company, possibly as much as $40/share, according to oil and gas analysts at Benesch Friedlander Coplan & Arnoff.
    • Possible buyers for the company include ExxonMobil (XOM), BP and Royal Dutch Shell (RDS.A, RDS.B), according to the report.
    • CHK likely will shed more assets in 2014 after already selling millions in assets, the report adds.
    | Feb. 11, 2014, 2:38 PM | 29 Comments
  • Feb. 6, 2014, 6:52 PM
    • Freezing weather across the U.S. this winter have pushed demand for natural gas to all-time highs, but at the same time a number of companies are saying the foul weather is hurting production.
    • The latest is Chesapeake Energy (CHK), whose oil and gas output in December was well below its expectations due to "weather challenges" that continued into January and February, CEO Doug Lawler told analysts on today's earnings call.
    • Anadarko (APC) said yesterday during its call that its operations in Colorado were finally returning to normal.
    • Estimated U.S. natural gas output is running ~800M cf/day lower than the 30-day moving average and is off 1.5B cf/day from the start of this year when temperatures were more moderate.
    | Feb. 6, 2014, 6:52 PM | 8 Comments
  • Feb. 6, 2014, 11:17 AM
    • Chesapeake Energy (CHK -5%) trades sharply lower following disappointing production guidance and plans to cut 2014 capex by 20%.
    • In the conference call following the news, CHK said its average daily production during December was ~649K boe, well below its 2014 guidance range of 680K-695K; CHK expects Q4 2013 and Q1 2014 will mark its production low point and that it will see a significant Q/Q ramp-up beginning in Q2 (Briefing.com).
    • Brean Capital says capital allocation remains the biggest question mark for CHK, and remains unconvinced CHK can truly compete for capital at a sub $5/Mcf gas price.
    • CHK's 2014 outlook.
    | Feb. 6, 2014, 11:17 AM | 5 Comments
  • Feb. 6, 2014, 8:25 AM
    • Chesapeake Energy (CHK) says it expects to spend ~20% less on capital improvements in 2014, projecting a capex budget of $5.2B-$5.6B.
    • After adjusting for 2013 asset sales, CHK expects to generate 8%-10% production growth this year, consisting of 8%-12% oil production growth, 44%-49% natural gas liquids production growth and 4%-6% natural gas production growth.
    • As a result of ongoing cost control initiatives, CHK sees lower per-unit production and G&A expenses; production expenses are expected at $4.25-$4.75/boe, down ~10% Y/Y.
    • Shares -0.4% premarket.
    | Feb. 6, 2014, 8:25 AM | 1 Comment
  • Jan. 24, 2014, 2:45 PM
    • As the U.S. freezes and stocks plunge, benchmark U.S. natural gas futures topped $5/mmBtu for the first time since Aug. 2010 on expectations that continued cold weather would keep demand high for the heating fuel.
    • Natl gas has moved well into overbought territory during the last few days as consumers have pumped up their thermostats, and the spike may last a while longer given that the cold snap is set to continue all of next week.
    • Despite the run-up in prices for Jan. and Feb., longer-dated prices for the spring and summer remain below $4.50/mmBtu, providing little incentive for the likes of Chesapeake (CHK -0.1%), Devon (DVN -0.8%) and EOG (EOG -2%) to switch from oil to gas drilling.
    • The shift to backwardation is a big boost to United States Natural Gas Fund (UNG +8.2%) and even bigger to the leveraged VelocityShares 3X Long Natural Gas ETN (UGAZ +24.4%).
    • Other ETFs: GAZ, BOIL, DGAZ, UNL, KOLD, NAGS, DCNG.
    | Jan. 24, 2014, 2:45 PM | 39 Comments
  • Jan. 15, 2014, 7:22 PM
    • Exploration and production companies tend to track crude oil prices, J.P. Morgan's Joseph Allman says, so look no further than the current state of the oil futures market for a reason to be bearish on the sector.
    • WTI oil futures, which decline every quarter in 2014 and beyond, suggest an off year for the E&P group, Allman writes, noting that the set-up could be similar to 2012, when WTI was down 7% for the year and the S&P was up 13%.
    • That doesn’t mean that some oil stocks can’t outperform: Allman likes EOG Resources (EOG) and Noble Energy (NBL) among large caps for their “resource expansion and improved operations.”
    • His least favorite stocks in the sector include Anadarko Petroleum (APC), Devon Energy (DVN) and Chesapeake (CHK).
    | Jan. 15, 2014, 7:22 PM | 2 Comments
  • Jan. 10, 2014, 12:24 PM
    • Investors have been worried that Anadarko (APC +0.2%) might have more risks following the surprise ruling that it could be liable for as much as $14.2B related to its 2006 acquisition of Kerr-McGee, but Deutsche Bank says fears largely are unwarranted, with the worst case outcome now understood and risked by the market.
    • The long-term is mostly positive, the firm writes, as APC "likely comes out of Tronox in a more aggressive monetization/value realization mode with the market focused on NAV upside and improving operating trends in 2014."
    • APC trades at 5.4x 2014 EV/debt-adjusted cash flow vs. 6.4x for its average competitor; EOG Resources (EOG) trades at 7.1x, Noble Energy (NBL) at 8.7x times and Chesapeake Energy (CHK) at 7.3x.
    | Jan. 10, 2014, 12:24 PM | 1 Comment
  • Jan. 7, 2014, 2:16 PM
    • Chesapeake Energy (CHK +0.3%) is downgraded to Neutral from Buy with a $31 price target, down from $36, at BofA, which says the recovery thesis which initially attracted it to CHK's distressed valuation has largely played out.
    • While the firm expects CHK to accelerate efforts to improve efficiency across the board, including steps to increase free cash flow, much of this has arguably been recognized in a share price that appreciated 63% in the past year.
    | Jan. 7, 2014, 2:16 PM | 4 Comments
  • Jan. 2, 2014, 12:50 PM
    • In its newest investor presentation, Chesapeake Energy (CHK -2.2%) sees FY 2013 adjusted net income of ~$1.14B, 2013 adjusted EBITDA of $5B, total capital expenses down 48% Y/Y to $6.9B, and 2013 daily production up 3% Y/Y to 3,985b cfe/day.
    | Jan. 2, 2014, 12:50 PM | 3 Comments
  • Dec. 30, 2013, 3:53 AM
    • Chesapeake Energy (CHK) is paying tens of millions of dollars in services it's not using and on other seemingly wasteful costs as a result of asset sales it made to plug a $25B hole in its finances.
    • For example, as part of a number of deals to sell its pipeline business for over $4B last year, Chesapeake agreed to transport a certain amount of natural gas on lines that Access Midstream Partners (ACMP) now owns. The problem is that because Chesapeake is cutting back on drilling for new wells, the company isn't using the capacity it has reserved. It could now have to pay $400M to Access over the next five years to cover the shortfall.
    | Dec. 30, 2013, 3:53 AM | 7 Comments
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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.