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Chesapeake Energy Corporation (CHK)

  • 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.
  • Tue, Apr. 14, 2:49 PM
    • Aubrey McClendon's Utica shale company will give 6K acres of Ohio land to Chesapeake Energy (CHK +3.4%) and pay up to $25M in a partial settlement with the company he brought to prominence.
    • CHK filed a lawsuit in February alleging McClendon took data from the company when he left in 2013; McClendon’s new American Energy Partners bought huge swaths of acreage in eastern Ohio, where it today remains one of the major acreage holders.
    • Energy & Minerals Group, an investment firm headed by John Raymond that has put billions of dollars into American Energy, reached the settlement without informing McClendon of the decision.
  • Wed, Apr. 1, 9:10 AM
    • Chesapeake Energy (NYSE:CHK) +2.4% premarket after Chairman Archie Dunham discloses the purchase of 1M CHK shares worth $13.98M.
    • The purchases occurred on March 27 at an average price of $13.9793; Carl Icahn recently bought more CHK shares at an average price of $14.15.
    • Dunham is now listed as beneficially owning ~2.635M CHK shares.
  • Mon, Mar. 23, 6:13 PM
    • Chesapeake Energy (NYSE:CHK) is now +3.5% premarket after Carl Icahn disclosed he has increased his active stake in the company to 73M shares, or 10.98%, up from 66M shares (9.98%) in December.
    • Southeastern Asset Management maintains the largest holding in CHK, with an 11.1% stake as of Dec. 31.
    • During after-hours, CHK also lowered its 2015 capital spending outlook by $500M, citing weak commodity prices.
  • Thu, Mar. 19, 9:09 AM
    • Chesapeake Energy (NYSE:CHK-3.4% premarket after Sterne Agee downgrades shares to Underperform from Neutral with a $9 price target, citing downside risk to its $2.70/Mcf 2015 Henry Hub natural gas forecast.
    • Sterne says it supports CHK's moves to remove balance sheet opacity, but financing decisions from the previous management are driving sub-optimal capital allocation amid depressed commodity prices.
    • The firm says it is late on the downgrade call given CHK's underperformance YTD, but believes shares remain overvalued as concerns on capital allocation and overall asset quality linger.
  • Fri, Feb. 27, 10:54 AM
    • Chesapeake Energy (CHK -2.4%) discloses that it expects to write down the value of its oil and gas properties in Q1, with more writedowns in subsequent quarters if prices stay low, according to its latest 10-K filing.
    • "Based on the first-day-of the-month prices we have received over the 11 months ended February 2015, we expect to have a material writedown in the carrying value of our oil and natural gas properties in the first quarter of 2015," CHK says.
  • Thu, Feb. 26, 11:59 AM
    • Chesapeake Energy (CHK -4.1%) is sharply lower for a second straight day following disappointing Q4 earnings, as UBS downgrades shares to Neutral from Buy and cuts its price target to $19 from $24.
    • The view is that CHK offered a "surprisingly weak outlook" for volumes and price realizations, and the company's adjustment to growth for Marcellus curtailments (+3%-5%) does not add up since CHK has little incremental contracted takeaway capacity in the future.
    • Also, Jefferies reiterates its Hold rating but with a reduced stock price of $16, as it guides CHK's headline volumes to fall 7%-8% in 2015.
    • However, Oppenheimer says the two-day decline is an overreaction to overspending; despite the big earnings miss, CHK has "one of the most attractive asset portfolios of any E&P company,” the firm says.
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  • Wed, Feb. 25, 3:28 PM
    • Chesapeake Energy's (CHK -9.5%) team of "value barbarians" has worked to bring the company's costs in line after years of overspending, but CHK will continue to outspend its cash flow in 2015, CEO Doug Lawler said in today's earnings conference call.
    • CHK is forecasting weak pricing for the full year in the Marcellus Shale, and says it started shutting in ~250M cf/day in Marcellus natural gas production in December; CHK plans to run only one drilling rig in the area this year, down from five rigs operating there last year.
    • On CHK's plans for the $5B it made on last year's sale of a big piece of its Marcellus and Utica gas business to Southwestern Energy, Lawler said CHK could use the money to pay down debt, fund its exploration program or acquire new properties or another company.
    • CapitalOne analysts consider Q4 results soft, telling clients that CHK's "weaker than expected liquids pricing plus 2015 guidance for production" likely would drive Wall Street estimates lower.
  • Wed, Feb. 25, 9:24 AM
  • Wed, Feb. 25, 8:18 AM
    • Chesapeake Energy (NYSE:CHK) -4.4% premarket after reporting weaker than expected Q4 earnings and saying it will cut its 2015 spending and rig count in response to lower crude oil prices.
    • CHK says it plans total capital spending of $4B-$4.5B in 2015, 37% lower at the midpoint than the $6.7B spent in 2014, and will operate only 35-45 rigs this year, the lowest number since 2004 and down from an average of 64 rigs in 2014.
    • Even with the cutbacks, CHK forecasts 2015 oil and gas production to grow 3%-5% to 645K-655K boe/day.
    • In Q4, CHK's average production increased 12% Y/Y to 729K boe/day, while revenue rose 11% to $5.05B and driven by 47% revenue growth in its natural gas, oil and natural gas liquid segment; operating expenses fell 4.7% to $4.09B.
  • Tue, Jan. 20, 11:33 AM
    • Chesapeake Energy (CHK +1.9%) moves higher as a report speculates that the company could be a potential acquisition target of India's ONGC.
    • India's government has directed state-run ONGC to make some acquisitions to hedge themselves against higher energy prices in the future, and reportedly considers CHK a strong strategic target, given its recent sales, balance sheet and diversification through two commodities.
    • The report says ONGC could already be in talks with a North American gas and oil company, with CHK believed to be the target.
  • Mon, Jan. 12, 3:17 PM
    • Goldman Sachs upgrades a few energy stocks even as it cast a pall of gloom over most of the sector today (I, II, III), raising Chesapeake Energy (CHK -3.6%) to Buy from Neutral and Parsley Energy (PE -4.2%) to Neutral from Sell as potential "shale sale" winners.
    • Despite PE's relative vulnerability to lower oil prices because of its weak balance sheet and negative projected free cash, Goldman has more confidence that its core Permian Basin position makes it an attractive M&A target.
    • Among potential "shale scale" winners - companies that either can build positions in the core and reduce costs of capital - the firm's favorites remain EOG Resources (NYSE:EOG), Range Resources (NYSE:RRC), Pioneer Natural Resources (NYSE:PXD), Cabot Oil & Gas (NYSE:COG) and Concho Resources (NYSE:CXO).
    • However, Goldman cuts Bill Barrett (BBG -8.3%) to Sell from Neutral, seeing greater downside risk to its production in a lower oil price environment, and lowers Eclipse Resources (ECR -1.5%) to Neutral from Buy due to a persistently wide funding gap through 2017 coupled with a weak balance sheet.
  • Mon, Jan. 5, 12:18 PM
  • Dec. 23, 2014, 12:33 PM
    • Chesapeake Energy (CHK +7.9%) and Southwestern Energy (SWN -2.2%) are headed in opposite directions today after SWN's $5.4B price tag on its purchase of Marcellus Shale assets from CHK is the most the company has ever paid in an acquisition.
    • At ~$13K/acre, CHK's 413K net acres, wells and equipment fetched a price that energy producers typically have been paying for land soaked in oil, not gas, analysts say; SWN "paid literally 2x or 3x times more than any gas deal we’ve seen in the last few years... 20% higher than anyone would have thought,” according to Wunderlich's Jason Wangler.
    • In a conference call today, SWN CEO Steve Mueller said the company believes the acreage has more than enough potential to grow to a size that would justify the high price, and investors will see “significant cash flow in just a few years.”
    • Sterne Agee's Tim Rezvan says the deal proved recent speculation on CHK's ability to close its previously announced sale to SWN unfounded and opens up CHK's road to investment grade credit.
  • Dec. 23, 2014, 9:18 AM
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  • Dec. 22, 2014, 4:37 PM
    • Chesapeake Energy (NYSE:CHK+3.2% AH after closing its asset sale to Southwestern Energy (NYSE:SWN) for net proceeds of $4.975B, $400M less than expected due to a settlement for various items, including SWN's waiver of any future claims related to title defects and environmental liabilities.
    • The properties sold to SWN consist of ~413K net acres and 1,500 wells located in West Virginia and Pennsylvania with 57K boe/day in net production, along with related property, plant and equipment.
    • Also, CHK's board authorizes a $1B stock buyback program.
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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.