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Harry Johnson

Harry Johnson
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  • Chesapeake: Is Management Sending Hints Of A Complete Buyout? [View article]
    Any serious buyer would want to have the "McClendon problem" out of the way before an offer...

    Why would a serious buyer care one way or the other since McClendon couldn't block an offer and it wouldn't take more than 30 seconds to give him a pink slip when the deal closed ?

    Stranger things have happened vis-a-vis acquisitions, but it is hard to see $50/share when development of half of CHK's resource base is uneconomic at present, the Company is supposedly adding quality oil reserves, yet not fast enough to offset continuing impairments (another $3.3 billion in the third quarter), and net liabilities increase every quarter. $50/share comes out to about $33 billion, and if that is net $50 to stockholders, adding net liabilities brings the purchase price to $50 Billion.

    Seems like a prudent buyer would wait for the auditors and outside engineers to finish up the 2012 financials before making a move. Moreover, even letting a prospective buyer in the door before a respectable period of time has passed after the COB has started unequivocally that the Company isn't for sale, as Archie Dunham did today, could conceivably raise the ire of the new SEC Chair.

    But what do I know. I sold my company when oil was $10/barrel and NG around $1.50/Mcf. (That isn't a complaint).
    Jan 30 08:59 PM | 1 Like Like |Link to Comment
  • SandRidge Energy: Should Tom Ward Go? [View article]
    Or maybe "Thundermug Energy." (For you youngsters out there, a Thundermug is what they called the pot kept under the bed in the old days in case you had a call from nature in the middle of the night and didn't want to take the long cold walk to the outhouse.)
    Jan 30 01:22 PM | 1 Like Like |Link to Comment
  • Carl Icahn offers kind words for Aubrey McClendon as the Chesapeake (CHK) CEO heads for the door: "Aubrey has every right to be proud of the company he has built... and the collection of assets he has assembled... the best portfolio of energy assets in the country." CHK +10.8% AH. [View news story]
    Just a rhetorical question auto44. You are probably right. Used to be an old saying "Borrow a little money and you have a serious lender; borrow a lot of money and you have a serious partner." Highly probable that CHK has violated the bond indentures, but so what if the bondholders call the bonds if CHK doesn't answer.
    Jan 30 01:14 PM | Likes Like |Link to Comment
  • McClendon's Departure From Chesapeake Should Prompt Further Changes And Equity Appreciation [View article]
    To rayduke and Zvi Bar's comments about quality jobs and profits to smart (lucky ?) investors, it can also be added that CHK made a lot of people wealthy by paying higher prices than others were willing to pay for leases, rigs and other things necessary for explosive growth. That is one of the reasons some in the industry resented the upstart.
    Jan 30 12:46 PM | Likes Like |Link to Comment
  • Chesapeake Energy Corporation Announces CEO Succession Plan [View article]
    Fearless Prediction:

    AM will run for the U.S. Senate or for Governor of Oklahoma within the next five years (and will win).
    Jan 29 09:59 PM | Likes Like |Link to Comment
  • Carl Icahn offers kind words for Aubrey McClendon as the Chesapeake (CHK) CEO heads for the door: "Aubrey has every right to be proud of the company he has built... and the collection of assets he has assembled... the best portfolio of energy assets in the country." CHK +10.8% AH. [View news story]
    Unless the lenders want their money before Nat Gas goes up big time.
    Jan 29 09:53 PM | Likes Like |Link to Comment
  • How Did Chesapeake Sell $12 Billion Of Assets And Actually Increase Its Debt? [View article]
    Ho Hum.
    Jan 29 09:51 PM | 1 Like Like |Link to Comment
  • TPG-Axon calls for another review by "credible experts" of land deals involving a company run by the son of SandRidge Energy (SD -2.3%) CEO Tom Ward, as the slugfest between the two sides continues. "For the board to dismiss our concerns as 'entirely unremarkable' is in fact remarkable," says the hedge fund, which has already moved to replace Ward and other board members. [View news story]
    Would ex-Wall Streeters know a "credible expert" were they to chance across one ?
    Jan 28 06:42 PM | Likes Like |Link to Comment
  • TPG-Axon releases a presentation detailing SandRidge Energy's (SD) related-party land transactions, including a call for an investigation of CEO Tom Ward. Entities affiliated with Ward's family appear to have acquired acreage in advance of purchases by SD in the same areas, then either sold it to third parties or kept it, TPG says. [View news story]
    Don't have a dog in the fight, but think about this:

    Frenetic leasing by dozens of companies in three states. Company and contract landmen swarming county seats and farm houses in search of mineral owners. Every coffee shop in every hamlet in Oklahoma and Kansas rife with rumors about a big leasing play.

    So how does one prove that Entity A shared a secret with Entity B when half of the oil industry knew the secret ? Very easy if you are a lawyer - simply take about 10,000 depositions, get copies of the leases covering several million acres, examine each item, and if Entity A has one lease adjacent to Entity B, build a circumstantial case of conspiracy and collusion between A and B. Guaranteed to take upwards of ten years, enrich hundreds of lawyers, and leave stockholders poorer than when it started.

    SD and TPG-Axon....a pox on both your houses.
    Jan 23 10:09 PM | Likes Like |Link to Comment
  • No Bakken, But Everything Else - Chesapeake Energy Is Set Up To Succeed [View article]
    Lots of people have been geniuses until the loan window closed on them.
    Jan 22 09:41 PM | 4 Likes Like |Link to Comment
  • No Bakken, But Everything Else - Chesapeake Energy Is Set Up To Succeed [View article]
    Many things positive, but assets were sold to pay down debt, yet debt contimues to climb, illustrating the hard fact that CHK is a very inefficient operator and cannot succeed until management gets costs under control.
    Jan 22 10:33 AM | 8 Likes Like |Link to Comment
  • Call Me Crazy, But I Think Chesapeake Energy Has Turned Over A New Leaf [View article]
    Commendable as the new board's actions are, like I have said before, ultimate success will require micro management at the field level, not macro management at the board level. Moreover, history has shown that once service company contractors (especially drilling contractors) have caught up with demand, in house service companies become an uncompetitive drag on earnings.

    Been there and done that !
    Jan 11 12:22 PM | 3 Likes Like |Link to Comment
  • Chesapeake Continues To Correct Its Ways [View article]
    It is crazy talk, but what a novel idea for corporate America. Now if we could just develop the same program for Congress............
    Jan 8 07:55 PM | 4 Likes Like |Link to Comment
  • Bakken Update: EOG Wells Model EURs Over 2 Million Barrels Of Oil [View article]
    Great stuff Mike. I think relatively short laterals with as much propant and water as can be handled in a reasonable time frame, followed by tight chokes is going to produce better ultimate results. Opening up the choke to get an impressive IP will reduce relative permeability to oil and probably steepen the decline curve. Being one, I think it is easy for an engineer to be enticed by longer and longer laterals. Although the technology is awesome, there may be a point at which it makes more sense to increase well density. Laterals eight to ten thousand feet long and 30 plus frac stages could tax pumping equipment, not to mention human endurance. Just a gut feeling, but frac control might become problematic if the EOG formula is applied to 10,000 foot laterals.

    Disclaimer: My comments aren't based on hard science, but are more just thinking out loud.
    Jan 7 07:46 PM | 4 Likes Like |Link to Comment
  • Can An Activist Shareholder Prop Up SandRidge Energy's Stock Price? [View article]
    "A more probable path to unlocking the "hidden" value in the stock lies, in my opinion, through operations (as opposed to the M&A market), regardless of who controls the Board."

    Couldn't agree more. Moreover, the history of financial types who would be oilmen isn't very exciting (and neither is TPG-Axon's BOD slate). Ultimate success in plays like the Mississippi requires micro-management of field operations; not macro management at the Board level.
    Jan 7 11:49 AM | 3 Likes Like |Link to Comment