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Chesapeake Energy Corporation (CHK)

- NYSE
  • Jun. 2, 2014, 3:31 PM
    • Walter Energy (WLT -6.3%) shares aren't helped by the coal producer's statement that new EPA proposals aimed at controlling carbon emissions from U.S. power plants should have no material impact on the company; in fact, WLT is down more than peers: CNX +1.1%, BTU +0.1%, CLD -0.3%, ACI -2.8%, ANR -4.6%.
    • Long-term losers also will include electric companies that burn lots of coal - such as American Electric Power (AEP +0.1%), Duke Energy (DUK -0.3%), Southern Co. (SO -0.3%) and NRG Energy (NRG -0.1%) - but stiff regulations have been expected for some time.
    • Likely winners include companies that pump natural gas and those that use it as their primary fuel, such as Calpine (CPN +0.3%), and companies that operate nuclear plants that generate little carbon but have been expensive to run, such as Exelon (EXC -1%), hope that their aging plants will become more competitive.
    • A reduction in coal-fired capacity would increase utilities' demand for natural gas by 3B-10B cf/day from 22B cf/day now, potential benefiting major natural gas producers like Chesapeake Energy (CHK +2.1%), Cabot Oil & Gas (COG -0.8%) and Range Resources (RRC -0.6%).
    • ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, GASL, DUG, IYE, GASX, PXJ, FENY, RYE, UPW, FUTY, RYU, FXN, FXU, DDG, SDP
    | 26 Comments
  • May. 29, 2014, 8:42 AM
    • Oklahoma Gov. Fallin signed legislation yesterday that will raise taxes on the state's oil and gas wells but was supported by the state's largest oil and gas producers, Devon Energy (DVN), Continental Resources (CLR) and Chesapeake Energy (CHK).
    • The new law takes effect in 2015 and will tax energy companies at a 2% rate on a well's oil and gas output for the first three years of its life; after that, the tax rate rises to 7%.
    • Critics say the higher rate still falls short of what's needed to help fund education and infrastructure improvements.
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  • May. 27, 2014, 2:42 PM
    • Chesapeake Energy (CHK +2.1%) is fighting back against collusion charges, accusing Michigan authorities of cherry picking internal documents to support their contention it colluded with Encana (ECA -0.9%) in dividing up oil and gas lease bids in the state.
    • Michigan authorities have charged the companies with driving down the price of oil leases by conspiring over which counties each would seek resource exploration rights during a May 2010 auction.
    • Among the evidence the state's lawyers say back up their accusations are CHK e-mails suggesting the firms "throw in 50/50" on the bids, but in new court filings, CHK cites other parts of the same e-mails to show former CEO Aubrey McClendon was open to competition.
    | 2 Comments
  • May. 19, 2014, 7:17 PM
    • Mexico, Iran and other countries that once played hardball with big oil companies are now rolling out the welcome mat, offering generous deals in the hope they will bring capital to stimulate output.
    • But it isn't certain the big oil firms will want to return to all those countries, as the economics of the oil business may be changing to favor different kinds of exploration projects elsewhere in the world, WSJ reports.
    • The biggest shake-up is coming in Mexico, where production has been falling steadily while rising electricity demand has forced dependency on imported natural gas and sent prices soaring; Total (TOT), Chesapeake (CHK) and Chevron (CVX) have expressed interest in entering the country.
    • Iran is considering big changes to its current stringent oil terms, but some analysts say "it will be a slow process to get Western oil companies back to Iran... Iran's reservoirs are prolific, but they are also complex and in poor shape."
    • Also, he Ukraine crisis has reinforced the trend in thinking about geopolitical risk as being a big factor.
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    | 7 Comments
  • May. 19, 2014, 2:59 PM
    • Chesapeake Energy (CHK +1.1%) gets votes of confidence from at least three market analysts after last Friday's negative reaction to news of the details surrounding the planned spinoff of its oilfield services business.
    • Analysts at Tudor Pickering upgrade CHK's rating to Hold from Trim, KLR Group raises its rating to Buy from Accumulate with a $37 price target (from $33), and Jefferies maintains its Buy rating while lifting its price target on the shares to $35 from $31.
    • The firms cite improved capital productivity and say Friday's dropoff was an overreaction.
    | 1 Comment
  • May. 16, 2014, 9:59 AM
    • Chesapeake Granite Wash Trust (CHKR -7.3%) is under pressure after Chesapeake Energy (CHK -3.8%) revealed plans to proceed with a spinoff of its oilfield services operations by the end of next month as it also plans other asset sales.
    • Shares are also going ex-dividend today.
    • CHKR revenues and distributions depend on the timing of initial sales from CHK's development wells in which the trust receives an interest, as well as the sales volume and prices attributable to the Trust's royalty interests.
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  • May. 16, 2014, 7:29 AM
    • Ahead of its investor day, Chesapeake (CHK) says it plans to spin off its Oilfield Services Business to shareholders in a tax-free transaction that will remove $1.1B in debt from the parent company's balance sheet.
    • The division will be renamed Seventy Seven Energy and will grant Chesapeake a dividend of $400M to repay inter-company debt.
    • Chesapeake also intends to divest its ownership of CHK Cleveland Tonkawa, which will improve its balance sheet, mostly by eliminating $1B of equity attributable to third parties.
    • In addition, Chesapeake has agreed to sell various non-core assets for $600M.
    • The transactions will lead to a net leverage reduction to Chesapeake of nearly $3B but only lower its 2014 output by 2% and its operating cash flow by $250M. The deals will also cut Chesapeake's 2014 interest expense and dividend payments by $70M and eliminate $200M of projected capex.
    • Following these deals, Chesapeake expects 2015 production to grow 7-10% and capex of $5.5-6B. The company is targeting five-year annual production growth of 7-9%.
    • Shares are -3.8%. (PR)
    | 7 Comments
  • May. 9, 2014, 11:58 AM
    • Wall Street’s idea of investing in climate change means investors are piling into natural gas - the least polluting fossil fuel - as energy have accounted for nearly two-thirds of the $8B of inflows into sector-based ETFs this year.
    • A White House advisory panel said this week that global warming already is blighting the U.S. with more intense coastal flooding, rainstorms and wildfires, but “weather extremes are good for the energy business," says money manager Skip Aylesworth.
    • Climate change is proving to be a boon for energy investment; on the day the report was issued, the S&P Energy Index hit a record, and $322M flowed into ETFs that specialize in energy.
    • "Natural gas is a potential bridge to new technologies that are green or clean,” says State Street's David Mazza, which he says has sparked investor interest in companies such as Nabors Industries (NBR), EOG Resources (EOG), Anadarko Petroleum (APC) and Chesapeake Energy (CHK).
    • ETFs: XLE, ERX, VDE, OIH, ERY, FCG, DIG, DUG, GASL, IYE, GASX, PXJ, PXI, PSCE, FENY, RYE, FXN, DDG
    | 11 Comments
  • May. 8, 2014, 8:15 AM
    • The SEC has ended an investigation of Chesapeake Energy (CHK) and former CEO Aubrey McClendon and does not intend to recommend enforcement action, according to the company's latest 10-Q filing.
    • The two-year probe concerned a perk that allowed McClendon to invest in oil and gas wells CHK drilled; McClendon pledged his stakes in the wells as collateral to borrow more than $1B, much of it from financial firms that also invested in CHK.
    • McClendon is now running American Energy Partners, a new private company that has hired CHK to drill wells in Ohio.
    | Comment!
  • May. 7, 2014, 8:23 AM
    • Chesapeake Energy (CHK) +2.6% premarket and may be poised to begin trading at a 52-week high after Q1 earnings and revenues skyrocket Y/Y and easily beat Wall Street expectations.
    • Q1 oil and gas production totaled 675.2K boe/day, up 11% Y/Y after adjusting for asset sales, consisting of 109.5K barrels of oil, 84.2K bbl of natural gas liquids and 2.9B cf of natural gas.
    • Average price it received for its gas during Q1 was $3.27/M cf, up from $2.13/M cf a year ago.
    • Raises 2014 total production growth outlook 9%-12%, up from an earlier forecast of 8%-10% growth, to reflect higher than expected natural gas liquids volumes; raises the midpoint of 2014 operating cash flow outlook by 13% to $5.8B-$6B from prior $5.1B-$5.3B due primarily to the increased production outlook.
    | 3 Comments
  • May. 7, 2014, 7:02 AM
    • Chesapeake Energy (CHK): Q1 EPS of $0.59 beats by $0.11.
    • Revenue of $5.04B (+47.4% Y/Y) beats by $520M.
    • Press Release
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  • May. 6, 2014, 5:30 PM
  • May. 6, 2014, 10:58 AM
    • Chesapeake Energy (CHK +0.6%) CEO Doug Lawler may take the company he inherited from founder Aubrey McClendon to the one place his deals-obsessed predecessor never wanted to go: overseas.
    • According to a Bloomberg profile, Lawler’s immediate goals are to curb spending and sell enough gas fields and side businesses so CHK’s expenses aren’t outstripping its cash flow for the first time in more than a decade, but his long-term ambition is to amass foreign fields and transform CHK from a U.S. shale driller into a global oil explorer in the mold of his former employer Anadarko.
    • The question for now is whether Lawler can ever get there: Despite the drastic cost-cutting, CHK's net debt has stubbornly hovered ~$12B, triple the size of Chevron’s, a company more than 10x larger by market value.
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  • May. 5, 2014, 3:58 PM
    • Encana (ECA -1.5%) pleads no contest and agrees to pay Michigan a $5M settlement that could clear it of criminal antitrust charges stemming from its role in a 2010 land leasing spree, while Chesapeake Energy (CHK +0.2%) said at a hearing today it would continue to fight its own criminal antitrust charges (earlier).
    • As part of ECA's settlement, the company agrees to cooperate with prosecutors in Michigan who are still pursuing a criminal case against CHK, which they allege was ECA's co-conspirator during the leasing spree.
    | Comment!
  • May. 5, 2014, 11:59 AM
    • Michigan prosecutors plan to call a former Encana (ECA) executive to testify on behalf of the state in a multi-day hearing in their criminal antitrust case against Chesapeake Energy (CHK) and Encana that begins today.
    • Kurt Froistad, a former land acquisition specialist at ECA's U.S. unit until Aug. 2011, exchanged emails with a counterpart at CHK about dividing up bidding responsibilities between the two companies in nine Michigan counties ahead of an Oct. 2010 state land auction.
    • Last week, the companies said they had received closure letters from the Department of Justice ending its federal investigation of possible antitrust violations related to their Michigan land-leasing activities.
    | Comment!
  • May. 2, 2014, 4:55 PM
    • Chesapeake Energy (CHK) must pay $121M to three Texas leaseholders after failing to persuade an appeals court to overturn a verdict that it reneged on deals to buy mineral rights when prices plunged in 2008.
    • CHK had agreed in 2008 to buy ~500 oil and gas leases from Preston Exploration and two affiliates, but backed out after gas prices plunged more than 50% shortly before the deal was to close.
    • The lawsuit is one of hundreds of landowner claims filed in federal and state courts in Texas, Michigan, Pennsylvania and other states alleging CHK broke contracts for oil and gas leases.
    | 5 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.