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Chesapeake Energy Corporation (CHK)

  • Oct. 17, 2014, 4:54 PM
    • Chesapeake Energy (NYSE:CHK) is on the cusp of gaining an investment grade rating for the first time after announcing yesterday that it was selling natural gas and oil shale fields for nearly $5.4B.
    • Moody’s and S&P both gave “positive” outlooks on CHK’s ratings which are one step from investment grade on each firm’s ratings scale.
    • Yesterday's deal will provide CHK "with sufficient wherewithal to reduce financial leverage to a greater extent than assumed in our base-case scenario,” S&P says, adding that an upgrade could result if debt is reduced by more than $5B.
    • CHK had ~$16.7B in total debt and preferred stock at the end of June.
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  • Oct. 16, 2014, 3:36 PM
    • Southwestern Energy (SWN -10.6%) appears to be paying a steep price to buy $5.375B in high quality Appalachia assets from Chesapeake Energy (CHK +16.7%); SunTrust estimates SWN paid $9,625/acre for the land, when previous deals in West Virginia had come in below $5K/acre and the sharp decline in commodity prices over recent months.
    • Stock investors clearly think CHK got a great deal, which is boosting shares of other West Virginia players such as Magnum Hunter (MHR +9.9%), Gulfport Energy (GPOR +6.7%) and Consol Energy (CNX +2.5%).
    • Topeka Capital believes MHR has superior assets in the core Utica and Marcellus, and an average of the transaction metrics on MHR's production and acreage implies upside of 39.2%; with its scale in the area, the firm thinks MHR makes for an attractive takeout over the next 12 months.
  • Oct. 16, 2014, 9:13 AM
  • Oct. 16, 2014, 7:24 AM
    • Chesapeake Energy (NYSE:CHK+2.7% premarket after agreeing to sell assets in the southern Marcellus Shale and eastern Utica Shale to Southwestern Energy (NYSE:SWN) for $5.375B.
    • The sale includes ~413K net acres and ~1,500 wells in northern West Virginia and southern Pennsylvania; average net daily production from the properties was ~56K boe in September, with net proved reserves of ~221M boe.
    • CHK says it expects FY 2015 production guidance to remain in the range of 7%-10% growth Y/Y adjusted for asset sales.
  • Sep. 22, 2014, 7:05 AM
    • Chesapeake Energy (NYSE:CHK) declares $0.0875/share quarterly dividend, in line with previous.
    • Forward yield 1.42%
    • Payable Oct. 31; for shareholders of record Oct. 15; ex-div Oct. 13.
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  • Sep. 12, 2014, 11:14 AM
    • Chesapeake Energy's (CHK -1.3%) stock price target is cut to $30 from $35 at Oppenheimer to reflect a weaker natural gas price outlook.
    • The firm expects CHK's stock performance to reflect management's ability to deliver on its strategic objectives of creating value through capital efficiency and superior operating performance, while strengthening and simplifying the balance sheet and growing production and cash flow.
  • Sep. 9, 2014, 2:18 PM
    • Chesapeake Energy (CHK +0.5%) must face trial on charges of felony racketeering and using false pretenses related to its land-leasing practices, a Michigan state judge rules.
    • The Michigan AG brought the charges against CHK in June, alleging the company directed its agents to lock up land positions in the state during the state's 2010 oil and gas leasing boom by offering signing bonuses to private landowners.
    • CHK says it believes the charges are without merit and expects to prevail at trial.
  • Aug. 28, 2014, 10:58 AM
    • The Marcellus region is now the world's biggest natural gas shale play, and there’s still $90B to be made by tapping the area’s reserves, according to a study by Wood Mackenzie.
    • The energy consultant predicts that the top 20 operators in the Marcellus will earn nearly $86B over the life of the play after the costs of reaching the reserves; for comparison, it estimates ~$118B to be made by extracting the resources in North Dakota’s Bakken region, but most production there is higher-priced oil.
    • Major Marcellus shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
  • Aug. 26, 2014, 3:49 PM
    • Cash earned from operations by 25 leading North American E&P companies is expected in aggregate to exceed their capital spending next year for the first time since 2008, according to a Financial Times analysis.
    • Shale companies' finances have improved rapidly as a result of a shift by many away from natural gas towards more lucrative oil production and a pick-up in natural gas prices after they fell to 10-year lows in 2012.
    • Analysts’ consensus forecasts now indicate that the leading shale companies’ operating cash flows in 2015 will show an excess of ~$2.4B over their capital spending vs. a shortfall of $32.2B in 2012 and $8.8B last year.
    • Case in point: Chesapeake Energy (NYSE:CHK) in 2012 had capital spending almost $12B ahead of its cash flow from operations, but this year and next it is expected to be able to cover its spending almost entirely from its income.
  • Aug. 7, 2014, 12:48 PM
    • Chesapeake Energy (CHK -1.1%) is upgraded to Buy from Hold with a $34 price target at Stifel, which says Q2 earnings confirm its view that CHK is becoming well positioned from a capex efficiency perspective heading into 2015.
    • The firm thinks the stock's current attractive valuation, combined with CHK's increasingly cleaned-up and simplified balance sheet and the recent correction in gas prices and equities, provide a fine entry point heading into what it sees as a positive production growth and capex efficiency trajectory in H2 and above consensus expectations for 2015 production growth.
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  • Aug. 6, 2014, 8:26 AM
    • Chesapeake Energy (NYSE:CHK) -3.3% premarket after missing Q2 earnings estimates, hurt by a loss on the repurchase of debt securities related to a refinancing and lower prices for natural gas liquids.
    • However, CHK raises its midpoint of 2014 production outlook by 10K boe, or 1.5%, to 685K-705K boe/day, attributable to better production trends in H1 and an expected increase in well connections during H2.
    • Q2 oil and natural gas production, adjusted for asset sales, totaled 694,650 boe/day, up 13% Y/Y, consisting of ~113K bbl/day of oil, 84.3K bbl/day of NGL and 3B cf/day of natural gas.
    • Q2 production of natural gas liquids rose 72% but the average price CHK received in the quarter fell 13% to $21.03/bbl.
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  • Aug. 6, 2014, 7:04 AM
    • Chesapeake Energy (NYSE:CHK): Q2 EPS of $0.36 misses by $0.08.
    • Revenue of $5.15B (+10.0% Y/Y) beats by $480M.
    • Press Release
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  • Aug. 5, 2014, 7:17 PM
    • Natural gas production in the Marcellus region exceeded 15B cf/day in July, the most productive period ever recorded there, according to a new report from the U.S. Energy Information Administration.
    • Marcellus, located mostly in West Virginia and Pennsylvania, now accounts for nearly 40% of total U.S. shale gas production, and its rapid growth isn’t expected to ebb soon, the report says.
    • New wells in the region are expected to deliver another 600M cf/day, more than offsetting decline rates, for a net production increase of 247M cf/day.
    • Major Marcellus shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN.
  • Aug. 5, 2014, 5:30 PM
  • Jul. 29, 2014, 9:11 AM
    • Chesapeake Energy (NYSE:CHK) says it plans to spend $1.26B to buy back all outstanding preferred shares issued by its CHK Utica unit to simplify its balance sheet and eliminate ~$75M in annual dividend payments.
    • CHK also says it will pay $450M as part of an agreement to exchange some acreage in Wyoming's Powder River Basin with private oil and gas producer RKI Exploration to consolidate its holdings in the southern portion of the basin.
    • CHK -0.7% premarket.
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  • Jul. 14, 2014, 8:10 AM
    • Exterran Partners (NASDAQ:EXLP) agrees to acquire natural gas compression assets from Chesapeake Energy (NYSE:CHK) subsidiary MidCon Compression for ~$135M.
    • The assets include 162 compression units, most of which are being used to provide compression services to BHP Billiton in Arkansas' Fayetteville Shale; as part of the deal, the contract operations services agreement with BHP will be assigned to EXLP.
    • EXLP says the deal will add immediately to distributable cash flow per unit.
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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.