Mmarrkk

Chesapeake Bites McLendon

CT: I really don't think Lea knows the difference between a Working Interest and an interest bearing CD. She just can't seem to put together a good story. Yes, she said it was overleveraged in the 70's, but that's not why this stock is down. Its also not down because Aubrey had to sell his shares to cover margin calls (hint Lea: that's not dumping per se). She might also have noticed that the majority of the ride down from 70 occurred before Aubrey sold a single share. She might also note that the shares are up above where they were when Aubrey sold the shares. Could it be that Aubrey is buying again, now that he's had a few days to move money around?

XTO, HK, CHK, etc all move down viciously in relationship to the price of NG, the view that demand would be going down and along with it the price of NG. Quite honestly, I see lots of people shutting in production and shutting down drilling programs. Drilling permits in the US for nat gas wells are flattening to down. This says production is going to start dropping soon, making the supply/demand balance teeter the other way and prices will move up to about $8. At that point, CHK's knockout hedges will be safe, they will be collecting $9 for their 85% of their gas and their revenues/cashflows will be strong.

Lea: can you guess what CHK's debt-to-cap ratio is?