Mmarrkk

Total Rating:
+3 / -2

257 Comments

    • Mon Nov 10th 16:52 PM | Rating: 0 0
      Commented on:
      Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term
      Old Wizard: regarding "equal benefits to those working in toyota and honda plants" in the US, are you suggesting that the benefits at the toyota and honda plants be increased? Seems like that would just doom another couple of plants in the US. I like having toyota and honda plants here in the US as it creates jobs in the US. We can debate whether their benefits are good enough but the fact that they can find people to work there means the benefits are competitive enough to attract the work force. I think benefits should be worked in the market. If the benefits aren't good enough they won't have the experienced people to build quality products. If the quality goes down, no one will buy their cars.

      Increasing their benefits will do nothing but increase the cost of the cars to the US consumers. That won't help our overall economy. Guess I'm kind of confused as to why we should increase the cost of a successful company to allow for unsuccessful companies to compete. The overall problem with the auto industry is that we are building too many cars/trucks overall. Reducing the overall manufacturing capacity by 30% would bring supply in line with demand. Building more cars in GM/Ford/Chrysler plants that no one wants won't help. I own 2 GM SUV's, 1 GM pickup and a Nissan pickup (my son's). all 4 vehicles bought at 20-30% below the MSRP. That tells me there is too much supply.


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    • Mon Nov 10th 15:14 PM | Rating: 0 0
      Commented on:
      Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term
      I agree that McCain lost because he lost! All I was saying is that he had one slim chance and that would have been to show himself significantly different from EVERYONE (Dems and Rep's) and fight against the bailout! I think there are a lot of folks who don't like the gov't bailing out companies and that may, MAY, have given him a shot. Didn't want to get into whether he, Bush or O have the right policies. It was more of a tactical thing. Right, wrong or otherwise, we'll leave that debate for another time. That's over for 4 years...my guy and my hopes lost. I'll get over it. Hopefully there will be something left in 4 years to argue about! Meanwhile I wish mr. O the best, except I hope his tax plans and healthcare plans fail miserably. Everything else I wish him the best on but don't like his ideas on other things. And I hope he can keep Rahm from chewing off someone's arm this year!

      Agree that the market for my 4 gas hogs will get worse when prices go up but here's the decision: spend a few dollars more per month on 4 vehicles or drop $100,000 right now to replace them! I've already factored in virtually no trade in value in the equation and it still doesn't make financial sense. Plus, I love the ride in my Suburban on vacations and I like the flexibility and work I get from the pick up!

      And yes, if the taxpayers are giving them money, we should expect something in return. But I'd rather not give them my money, particularly if it ends up in union hands. or bad management's hands.

      Agree about takeovers. Big shareholder of CHK and would love to see a takeover. However, look at companies with lots of cash on their balance sheet to do the buying. XOM has enough to buy everyone else, but this isn't their style. BP, CHV, etc. maybe.

      Longoil: are you seriously telling me that it is GOOD for the government to tell me what is best for me?? I don't care who's running the gov't, that is never a good idea in a free country. Should they take away all of our forks because lord knows we might stab ourselves with them??? Rather, they should use incentives to get people to use more efficient cars. Tax breaks to buy more efficient cars I can live with. Mandates that tell car builders they cannot build a car? nope, Mr. Jefferson and Mr. Washington would have had a problem with that.

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    • Mon Nov 10th 11:25 AM | Rating: 0 0
      Commented on:
      Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term
      Agree with almost all of your plan Fitz. I have one issue with your reply back on the US public wanting SUV's. You say its GM's patriotic duty to give Americans not what they WANT, but what they should have. I have a big problem with that. I don't want any politician, Dem or GOP telling a company they can only build certain things to sell to the general public. Or more insanely, they CAN'T build certain things even though the public wants it. What next? Tell McDonalds they can no longer sell french fries because those are not good for the public and it drives up healthcare costs? The slippery slope of big government worries me.

      In my opinion, McCain lost a great opportunity to win the last election by supporting the bail out. Had he stood against it, I think he would had a much better shot at winning the election. Our gov't is headed toward a place where most of us are not comfortable: being the owners of large portions of our major industries/services including banking, automakers, healthcare, etc.

      I really like the idea of loaning the automakers money with conditions and I like your NG car conditions. I'd also say they should have to reduce their capacity...shut down some plants, etc. Don't necessarily like the mandate that all vehicles get 40 mpg. I own 4 vehicles right now and none get 20 mpg (2 suburbans and 2 pick up trucks). But I'm not going to sell them and go buy something new. That's just not a good use of my money. I'll keep driving these four (or my wife, myself and my two boys will keep driving them) until repair costs are prohibitive.

      I'm not a big fan of the Prius due to the carbon footprint it takes to build and assemble one. Many key components built overseas. But I'd buy a NG powered Chevy pick up truck if I could get a NG hook up for the house or the neighborhood fueling station. Of course the environmental folks will get in an uproar over fugitive emissions and the lawyers will sue the pants off anyone when the first refueling accident occurs. But we have NG in this country and could definetly fuel a lot more vehicles with it versus imports.

      Also agree on your windfall profits comments. I work in this industry and I know exactly what will happen should our insane gov't slaps an insane tax on us. We will quit spending money in the US and start spending those dollars in other countries. Just the way of the world. Go XOM, Chevron, COP, etc. They are US companies. BP, Shell, Total are not but they are good investments too. Also, Devon, EOG, etc. on the NG side.
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    • Tue Nov 4th 09:36 AM | Rating: 0 0
      Commented on:
      Chesapeake Energy Unlikely To Remain this Cheap
      If, and that is a huge if, gas fell to $2-3, it would only be there for 2-3 months at the most. Why? because if it fell that far, many operators would shut in their production and would stop drilling wells. The wells that are being drilled these days need $6 gas to be economical. So if it falls below that, people will stop drilling. Now, when drilling slows down, the gas production in the U.S. falls off a cliff like a lead balloon. Within 2-3 months our total gas production would be low and we would be facing extreme shortages. What happens then class? Yes, prices rocket up! So short term drops below $6 can occur but they will not last long. A drop to the $2-3 range is a very very low probability occurrence...kind of like getting struck by lightning.


      On Nov 04 06:08 AM Dr. O. wrote:

      > What if natural gas falls to $2-3 from $6?
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    • Mon Nov 3rd 17:14 PM | Rating: 0 0
      Commented on:
      Chesapeake Energy Unlikely To Remain this Cheap
      Wes: yes CHK has lots of debt but have you looked at the loan covenants? Its all long term debt with excellent coverage in the next several years. The debt only impacts them as it pertains to getting access to more debt, which they clearly don't need. For now, they will learn to spend within their cashflow and will make a crap load of money via their hedges which are severely in the money at this point. They'll make one or two dispositions here and then drill several 10-15 MMCF/day Haynesville Shale wells and the teens will be in the rearview mirror. In 3-5 years you will have wanted to buy at $20.
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    • Mon Nov 3rd 10:21 AM | Rating: 0 0
      Commented on:
      Chesapeake Energy Unlikely To Remain this Cheap
      Augustus: do you really know much about the nat gas business? $20/acre? Really? People have been paying $100/acre for many many years in North Louisiana so your $20/acre is not realistic. And CHK's production is "declining"? Really? Looks like their production is increasing to me...to the tune of 15-20% or more. Not sure what numbers you are looking at but you might want to clean your glasses.

      Brother Maynard: you say nothing has changed since $4 gas?? Well, take a look at production curves. Gas drilled before 2006 is declining rapidly and must be replaced. The drilling that is going on is adding production well north of $4...more like $6. If prices stay below $6, very little drilling will occur, which will make our supply decline at a rate you will be scared of. Then when our production declines, prices will skyrocket. I view a $6 floor here which will still result in lots of rigs being shut down (already happening) and lots of new wells NOT being drilled (already happening...most of the very active companies have dropped their capital budgets by 20% or more). And some wells will be shut in to help boost the price up. Can't see $4 gas for anything more than a month a best and I think there's less than 10% chance we see that.

      Nothing has changed? May want to look at US/Canada gas production curves that show production segregated by initial year of production. You will see a harsh picture.
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    • Fri Oct 31st 16:11 PM | Rating: 0 0
      Commented on:
      Shorting the Long Bond: The Obama Solution Meets China
      Love it! If Obama stops the "tax breaks" for the rich. You mean those guys who pay over 50% of the taxes in this country? Those guys who own businesses and create jobs? yeah, that's going to help. His focus on increasing corporate taxes is scary. Did someone tell him that businesses create growth, government does not. We have the 2nd highest corporate tax rate in the world...wonder where businesses will go to create jobs...here where we tax and berate a successful business or other countries that actually appreciate successful businesses and encourage them to come to their country and MAkE MONEY. To hear Obama speak, you'd think profit and success are evil. The bottom line is he is a Democrat and their solution is always a) spend more, b) tax the rich, c) tax the successful, d) tax business, and e) give all of it to those who don't want to do anything to help. I guess his MENTOR and PASTOR was just saying out loud what O thinks:..."God D*** America!". What a crock.
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    • Mon Oct 20th 10:34 AM | Rating: 0 0
      Commented on:
      Why Oil and Gold Are Headed Much Higher
      While we can agree that demand destruction is occurring, do you know that supply destruction is also occurring? Look at the press releases concerning cutbacks in drilling budgets. This will start to crimp down on the amount of new production. Then there's our old OPEC buddies. They will be shutting down production. So as these things go through, you'll probably see supply drop as fast as demand, keeping the market balance pretty tight. At $50/bo, drilling in Canadian oil sands and deepwater GOM comes to a stop. While we may see a short term price drop, in a year or so, our production will be very very low and at low prices, our consumption will start to grow again. Hence, you'll see $4 gasoline pretty soon. Maybe during 2009!
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    • Fri Oct 17th 10:36 AM | Rating: 0 0
      Commented on:
      Chesapeake Bites McLendon
      Good answer T. Muller. But facts and figures, cashflow, etc. doesn't matter to Lea. Just keep spewing the same ol same old. She keeps bringing up exposure to hedge contracts. Thos contracts are actually pretty safe. They aren't overloaded with any one company so even if one does fall apart, they have the other 90% to fall back on. And her point that no one would write contracts with them due to doubt...well at today's gas prices Aubrey would not be looking to write NEW hedge contracts. He's sitting back cashing in on his old ones. But that's the problem: Lea doesn't really understand the complexities of the oil/gas business, what drives the financials and cashflow, etc. The plan is NOT to get into new contracts when prices are low; but when prices rise to what seems like "frothy" levels (like they were earlier this year) then you load up on them. That's what Aubrey has done and that's why he's getting paid $9+ for his gas when the market is paying $7.

      The Haynesville and Fayetteville deals he got from Plains and BP were genious and exceptionally well-timed. At the peak of the market, he was able to sell 25% of his holdings in 2 of the hottest plays; he got prices that were ridiculously high, paying for the portions he retained. And the kicker? He also got Plains and BP to agree to fund $1.8 billion each of drilling costs in 2009. So, he sells a company 25% of an asset for what he bought all the asset for, bringing his cost basis to almost zero. Then he gets that company to pay 100% of the drilling costs but he retains 75% of the operating revenue for a good portion of the 2009 program. Man, wish I could get that kind of leverage. Tony Soprano does, but usually not public companies!

      The asset deal they are doing this quarter (reportedly S. Texas and Marcellus) won't be near that sweet. But the assets are exceptional and will pull in an "okay" price.

      Cashflow issues easily controlled by doing what everyone else has to do: regulate spending! Breeze through 4Q and then 1Q 09. Stop back in the 40's during 2009 and probably back in the 70's in 2010.
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    • Tue Oct 14th 17:09 PM | Rating: 0 0
      Commented on:
      Chesapeake Bites McLendon
      Wrong about being an officer.

      Yes, down on the shares I bought at 40 but still up some of my older holdings. But I really am looking further out than the next 2 years.

      My only problem right now is that Cramer is back to pushing this stock! Talk about contrarian!!

      Tell you what, in 1 year, come back and tell me where CHK is! I'd bet a nice steak and a beer that a) they aren't bankrupt and b) I'll be well in the money! In the meantime, enjoy some good ol' OKC basketball brought to you by Aubrey and friends!
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    • Tue Oct 14th 15:32 PM | Rating: 0 0
      Commented on:
      Chesapeake Bites McLendon
      I believe that part of starting a company and nurturing it through its infancy and evolution is being rewarded. Aubrey and Tom started this company with $50,000 each of their own money. They took their ideas and their sweat equity, turned it into a viable entity and then took the company public. Part of the compensation for the company going public was the Founders Well Program. That was the deal made. That's why I support it.

      Do you think it is right for a company to have to pay a licensing fee to another company for use of their products/ideas? This is similar. The founders started the company, built it, then worked a deal to be compensated. Part of the compensation is this program. Included in their annual reports and in all disclosures is the fact that it exists and that Aubrey will get 2.5% WI in each well. When you buy shares of this company you are subject to these disclosures and in essence, agree to them. Fact: the disclosure says he gets a 2.5% WI. What he makes off of that is not our business. An investor in oil and gas companies should know what getting a 2.5% WI involves.

      By now, its well-known that he gets this WI. If someone (you) has a problem with that, then have them not buy the stock.

      End.
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    • Tue Oct 14th 12:32 PM | Rating: 0 0
      Commented on:
      Chesapeake Bites McLendon
      Okay, you see they are not giving him 2.5% of the Gross Income. Again, you prove you don't have a clue. He gets net revenue, just like BP, HK, or any number of other WI partners. YOu see, he pays for his 2.5% share of the drilling costs, then CHK gives him the NET REVENUE from the well, after deducting operating costs, COPAS overhead charges, transportation fees, royalties, and severance taxes. Does that sound like Gross Income to you?

      Please.

      And CHK doesn't have a cashflow problem...they have a spending problem. Cut their drilling/leasing budgets in half and they will be socking away cash on their balance sheets.

      Actually, without Aubrey's 2.5% program, their cash requirements would be 2.5% higher than they are right now! Not to mention Tom Ward's 2.5%. And again, this was granted to these two guys as founders of the company. Sorry, but that's what was agreed to a long time ago.
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    • Tue Oct 14th 10:06 AM | Rating: 0 0
      Commented on:
      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?
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    • Tue Oct 14th 10:00 AM | Rating: 0 0
      Commented on:
      Chesapeake Bites McLendon
      Lea: again, like you did months ago, you bypass my question completely. I asked you to explain how Aubrey's WI in wells was a conflict of interest? Can you answer that question first? In plain and simple english, write one paragraph (or ten) but stay on topic: how is Aubrey's WI in drilling programs a conflict of interest. C'mon now. I know they must have taught you how to stay on topic in grad school. On post, one topic.

      Then, we can have a discussion regarding all of the other items.
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    • Mon Oct 13th 21:10 PM | Rating: 0 0
      Commented on:
      Chesapeake Bites McLendon
      Please tell me how someone with a 2.5% WORKING INTEREST can create a conflict of interest? Do you know what a working interest is? He is paying his proportionate share for every well he participates in out of his own money. So, how can that be a conflict? If he forces the company to drill bad wells, guess what? He also loses. But if he forces the company to drill good wells, he AND THE COMPANY make money in proportion to the cash they put up. In this scenario, under no circumstance can he make money if the company doesn't. Its about as aligned as a CEO can get.

      Was he reckless with his own money? I'll let him, his wife and his kids decide that. I see someone who believed in what he was doing and where his company was going...so much so that he put his own fortune at risk. He could have stuck in CD's or something and been content.

      If you look at the debt structure of the company, you will see that they are not in any real danger of having these loans called in. They don't come due for a while. All he has to do to solidify the balance sheet is stop drilling for a couple of quarters or find someone to invest in one of his drilling programs. Quite frankly, I think CHK will be back in the 70's within 3-5 years. I'm not going "all in" like Aubrey did, but I've got a nice chunk of change riding on it. Buying it at $15 was a gift. Worst case scenario: ExxonMobil buys it at $25 between now and the end of the year!!
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