Tue, Sep. 1, 9:13 AM
Wed, Aug. 5, 12:24 PM
- An early sigh of relief evaporates as Chesapeake Energy (CHK -9.5%) shares plunge to new 12-year lows following its Q2 report and after CEO Doug Lawler said in this morning's earnings conference call that he does not expect any significant recovery in prices.
- The CEO also said CHK is in discussions with potential investors about cash-raising deals that could involve asset sales or drilling partnerships.
- Lawler said he is not worried about low energy prices deflating offers from potential partners, since any investors considering taking stakes in the company’s fields are focused on how much crude and gas they will yield and at how cheap a per-unit cost.
- CHK also said in the call that it is curtailing 275M cf/day of gas production in the Utica Shale through October.
Wed, Aug. 5, 8:28 AM
- Chesapeake Energy (NYSE:CHK) +1.9% premarket after meeting Wall Street expectations with an $0.11/share Q2 loss on $3B in revenues that came in 41% less than a year ago but slightly better than estimates.
- On a GAAP basis, CHK reported a net loss of $4.15B, or $6.27/share, primarily due to a $3.67B drop in the carrying value due to the low prices for oil and natural gas; the drop was roughly the same size as CHK's Q1 drop in carrying value.
- CHK says its Q2 production averaged 703K boe/day, up 13% Y/Y and up 2% Q/Q, adjusted for asset sales, consisting of 119.5K barrels of oil, 3B cf of natural gas and 79.2K barrels of natural gas liquids, which represent respective Y/Y increases of 11%, 11% and 24%.
- Natural gas accounts for 72% of CHK's production, and the company's average realized price for natural gas for Q2 was $1.01/Mcf, down from $2.45 a year ago and $2.37 in Q1; the average realized price per barrel of oil was $67.91, down ~$17.50/bbl Y/Y but up more than $5 Q/Q.
- Operating cash flow at the end of Q2 was $606M, compared to $1.269B in the prior-year quarter.
- CHK revises its outlook for the rest of 2015, with total production now expected to rise 5%-7% to 667K-677K boe/day, up 4% from the midpoint of prior guidance.
Mon, Jul. 27, 2:15 PM
- Chesapeake Energy (CHK +2.2%) is upgraded to Buy from Neutral with a $15 price target at SunTrust, in part because the firm sees the potential for a sale of the struggling company.
- SunTrust looks for CHK's share price to rebound with an additional asset sale, and sees the company potentially duplicating last year’s success by selling some non-core assets in the Powder River Basin or Mid-Continent South, with either possibly generating $500M-plus in proceeds, which could be used to take activity higher than the 9-19 rigs 2015 year-end forecast; the firm adds that it "would not be surprised to see an entire company sale."
- The firm does not see the nearly $7B in liquidity as an issue with a projected outspend of less than $1.5B this year, though CHK’s operating efficiencies appear to be getting buried in the current troubled commodity environment.
Wed, Jul. 22, 3:19 PM
- Chesapeake Energy (CHK -2%) is downgraded to Neutral from Outperform with a $13 price target, cut from $20, at Credit Suisse, which sees a company totally on the defensive and focusing on protecting its balance sheet rather than increasing its production and/or expanding its holdings.
- In an environment where operational efficiency has become critical, analyst Mark Lear considers CHK’s asset base sub-par and providing little cause for investment in such a weak oil and gas price environment.
- While Lear upgrades the energy E&P sector and issues high ratings for several individual stocks, he advises would-be CHK investors to "look elsewhere for investment in this environment and consider operators with core exposure and more flexible balance sheets that are capable of accelerating net asset value even at the strip."
Tue, Jul. 21, 2:18 PM
- A dividend cut often is viewed favorably in the credit markets, but Chesapeake Energy's (CHK -7.3%) dividend suspension (I, II) is having the opposite effect on CHK bonds, which have lost ~$217M in market value so far today, as creditors may be unnerved about a cash balance that was lower than expected at the end of Q2.
- CHK’s $1B of 6.125% notes maturing in February 2021 have plunged nearly six cents to $0.875 on the dollar to yield 9%, Bloomberg reports.
- "The message being sent out is that the next six months are going to be equally as difficult as the last six months," a Gimme Credit analyst says. "Bondholders are saying ‘Whoa, if the company has to cancel the dividend, I guess maybe things are bad.’”
- Goldman Sachs wonders why a company with nearly $3B of cash and a $4B untapped credit line at the end of Q1 would care so much about saving $240M/year at the risk of upsetting equity holders, and suggests CHK may not be able to cut costs as much as expected, or that earnings will miss expectations, or both.
Tue, Jul. 21, 11:28 AM
- Chesapeake Energy (CHK -5.9%) tumbles to new 52-week lows after suspending its quarterly dividend for the first time in 14 years, while most energy names are moving higher in today's trade as crude oil prices rebound.
- "More bold actions like this are needed,” says Oppenheimer's Fadel Gheit, adding that CEO Doug Lawler "has to throw a lot of things overboard to save the ship."
- The move is prudent to improve financial liquidity, RBC analysts say; Tudor Pickering echoes that view, adding that few investors buy CHK for its 3.4% dividend yield.
- "Clearly, management believes that preservation of cash is more important than appeasing a beaten-down shareholder base’s desire for dividend income," says Sterne Agee CRT's Tim Rezvan, who also supports CHK's move; he recently upgraded CHK to Buy with a $13 price target.
Fri, Jul. 17, 12:35 PM
- Chesapeake Energy (CHK -4.9%) appears to be in the process of quietly skipping its quarterly dividend, according to Forbes' Antoine Gara.
- CHK normally would have announced its dividend about six weeks ago and set its quarterly payout to shareholders of record, Gara writes, but the company last announced its $0.875 quarterly dividend on March 5.
- In order to produce the cash flow to service its debt and financial commitments to contractors, CHK needs to maintain its oil and gas production, meaning the dividend could be sacrificed, Gara writes.
Mon, Jul. 13, 10:25 AM
- Sterne Agee CRT’s Tim Rezvan reiterates his bullish views on Chesapeake Energy (CHK -3.1%), citing the latest short interest data which shows a 14.1% increase from mid-June to the end of June to 185M shares, 27.8% of shares outstanding and 8.1 days to cover; the increase in short interest increase from the end of February to the end of June was 163%.
- The firm upgraded CHK to Buy from Underperform on June 29, reflecting what it considered as oversold conditions, and Rezvan says the month-end short interest data validates the thesis and expect profit-taking from shorts to provide further support to CHK shares into Q2 earnings.
- The largest increase in short interest came from PetroQuest Energy (PQ +0.1%), which had a 16.1% increase to 7.2M shares (11% of shares outstanding, 5.0 days to cover); Noble Energy (NBL -1.1%) also showed a notable jump, with a 10.3% increase to 17.9M shares (4.6% of shares outstanding, 4.1 days to cover).
- CHK is sharply lower today, apparently in reaction to late Friday's court order for CHK to pay nearly $380M to bondholders.
Thu, Jul. 9, 12:26 PM
- Energy stocks are setting the pace for today's trading, outperforming a positive broader market as crude oil prices bounce back by more than $1 on extended nuclear deal talk deadlines with Iran and China's stock market turnaround.
- Among top gainers so far: CHK +4%, WLL +3%, DNR +3%, NOG +8.1%, CLR +2.9%, SWN +2.5%.
- Oppenheimer's Fadel Gheit is unmoved, believing oil prices "could stay lower and for longer than expected based on the low level of M&A activities as the gap in expectation between potential buyers and sellers remains wide."
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Wed, Jul. 1, 3:58 PM
- Chesapeake Energy (CHK -5.5%) agrees to sell assets in Oklahoma’s Western Anadarko Basin to privately-held FourPoint Energy for $840M.
- FourPoint will get interest in ~1,500 producing wells in western Oklahoma that produce an average 21.5K boe/day, split between oil, natural gas liquids and natural gas; the assets cover nearly 250K net acres of mineral rights.
- CHK had drilled and completed more than 190 horizontal wells in the acquisition area since 2012, and halted drilling there this Q1 in anticipation of selling the wells, FourPoint says.
Thu, Jun. 25, 12:43 PM
- While UBS downgraded Chesapeake Energy (CHK -4.2%) and Murphy Oil (MUR -2.4%) today (I, II), the firm also upgrades Marathon Oil (MRO +1.4%) to Buy from Neutral with a $32 target price, finding MRO an attractive way to play its expectation for a long-term recovery in oil prices.
- UBS notes MRO's high oil exposure, above average debt-adjusted growth, leverage to low-cost resource in the Eagle Ford and SCOOP/STACK, strong balance sheet and inexpensive valuation vs. peers.
- The firm also says MRO is trading at a wider than normal discount to peers despite an above average cash flow per debt-adjusted share growth outlook.
Thu, Jun. 25, 8:17 AM
- Chesapeake Energy (NYSE:CHK) -1.5% premarket after UBS downgrades shares to Sell from Neutral while also cutting its long-term normalized natural gas price forecast to $4.00/MMBtu from $4.50.
- CHK carries "far too much financial leverage," prompting a material reduction in activity that is contributing to a declining production profile in 2015-16, and the shares are expensive relative to peers, analyst William Featherston writes in cutting his price target for the stock to $11 from $16.
Thu, Jun. 4, 11:48 AM
- Chesapeake Energy (CHK -3.8%) shares have been whacked by a third YTD as investors punish energy exploration firms that are considered likely to outspend their operating cash flow this year, but StreetAuthority's David Sterman thinks CHK appears poised to buck the consensus forecast this year and at least get to breakeven.
- CHK is "clearly healthier than it was a few years ago and is no longer at risk of a balance sheet blow up," Sterman writes, and its "strong base of real estate, coupled with impressive cost controls, could set the stage for a sharp spike in cash flow if energy prices rise from current levels."
- Sterman spots a subtle turnaround underway - one that appears to have prompted Carl Icahn to keep adding to his CHK position this year - as the company has cut the cost to develop and operate a well by ~30% in the past few years.
Wed, Jun. 3, 3:57 PM
- Chesapeake Energy (CHK -3.6%) tumbles as shares are downgraded to Underweight at Alembic Global Advisors, which notes "onerous" GTP contracts and a poor outlook for renegotiation.
- Alembic says CHK needs gas prices at or near $4/Mcf to tread water, and believes that without a rally in gas prices to $3.75 or higher or a change in the contract terms themselves, CHK is overvalued and will be pushed to a desperate and risky acquisition strategy (Briefing.com).
Wed, May 6, 8:26 AM
- Chesapeake Energy (NYSE:CHK) +1.5% premarket after beating Q1 earnings estimates but falling well short on revenues, and slightly raising its oil and gas production forecast for the year.
- CHK posted adjusted EBITDA of $928M vs. $1.515B in the year-ago quarter, and cash flow fell to $910M from $1.614B, due mostly to lower realized oil, natural gas and natural gas liquid prices.
- CHK’s Q4 average realized price for oil was $62.57/bbl, down from $85.08 in last year's Q1 and $76.40 in Q4, natural gas prices fell $0.90/MMcf Y/Y and $0.65 Q/Q, and natural gas liquids prices fell $22.46/bbl Y/Y and $6.12 Q/Q.
- CHK says Q1 oil and gas production averaged 686K boe/day, up 14% Y/Y after adjusting for asset sales, and now expects output of 640K-650K boe/day following its earlier forecast of 635K-645K.
- CHK operated 54 rigs on average in the quarter, compared with 67 in Q4 and 60 in the prior-year period, and expects to finish 2015 with 35-45 rigs, down 38% from an average of 64 rigs in 2014 and the lowest total since 2004.
- Says Q1 average production costs totaled $4.84/boe, down 5% Q/Q and 2% lower Y/Y.
- Q1 capital spending rose 8.6% Y/Y to $1.49B; reiterates guidance for $3.5B-$4B in capex for the full year.
CHK vs. ETF Alternatives
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.
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