Chesapeake's Improved Efficiencies And Liquids Focus Will Lift Margins [View article]
How can VPP's be a problem if they sold the gas for $4 now and have to deliver when gas is $10? CHK got the money up front when most likely the dollar was worth more. What bothers me is that it is accounted for as an asset sale that it is not. It costs to produce and deliver which will have to come out of future production, where the production costs have to come out of future earnings.
Chesapeake's Improved Efficiencies And Liquids Focus Will Lift Margins [View article]
Icahn buys cheap when the FED through its intermediaries buy cheap, and blow a bubble that gets shorted. Ever since the FED was created, this has happened again and again and again and again, etc. That is why the rich get rich and the poor get poorer. We have run out of poor suckers so now we have to use the middle class, and when they are poor, then the rich will have to prey on themselves
Chesapeake's Improved Efficiencies And Liquids Focus Will Lift Margins [View article]
I agree that CHK's drilling and production efficiencies have room for improvement. But I think CHK's stockholders need to ask just how much is gas in the ground worth if there is no economic rationale for going after it. Other things CHK stockholders should look at is the liabilities of CHK's VPP's. These volumetric production payments are accounted for as sale of assets, when in reality they are upfront sales of future flows from gas fields that will most likely cost them a lot more to produce in the future then what they are getting for that gas now in up front payments. CHK's preffered shares operate on the same principal as the VPP's that in reality are just more debt with a different name stuffed in off balance sheet accounting of bull shit accounting. New long term obligations should not be accounted for as sale of assets. In the last 10 years or so they stuck $20B into leases and a lot of that has to be renewed. To hold by production you have to drill, and to drill you have to have the ability to pay the cost of drilling. Those forward sales in the $4 to $5 range is going to hurt them when natural gas goes for $10 that will most likely happen in the next 5 years. Dollars do cheapen over time. If I was CHK I would come clean with the bullshit accounting, create a bond fund paying 5% interest to hold all assets not profitable in this low priced natural gas period until natural gas price reaches $10. 3/4 of their wells would fit into that catagory. Then I would issue new prefered shares to hold the profitable wells and buy back the joint venture deals at around 40% of the original price. Let present stockholders suck air.
Chesapeake Energy Has A Plan - And It's Working [View article]
Right now we are swimming in natural gas. Price is at $3.82. Our natural gas reserves that can be harvested profitable is decreasing at a rapid pace. The middle east in about 2 years time will double their natural gas production and export price for natural gas will fall. Our salvation of exporting LNG will be shortlived and counterproductive. We need to use it here as a raw material for production of real things, not let someone else do it overseas. The number 1 thing going forward is how to increase the velocity of money (not credit) moving through our economy. Stagnating velocity = stagnating economy. QE is debt and the more debt the FED creates, the worse things will get. At some point the FED will be forced to cease QE and then the deflation spiral will accelerate as a consequence of QE. We are doing what Japan has been doing for a long time. Trying to put lipstick on bad debt will not solve our problems just like it is not solving Japan's problems. Expansion of the central banks balance sheet is simply expanding our off balance sheet Treasury debt. Our Treasury debt is listed as near $17T when in reality it is 12 times that. The FED does not let printed dollars enter in circulation in debt free form, nor does it let computer entries of dollars enter into circulation in debt free form. QE is debt expansion of the central banks balance sheet that gets transferred to the people's balance sheet. We are going to end up like Detroit that simply can't pay. CHK is much like Detroit that can't pay for the very same reasons. Expenses are higher then income. CHK serves and works for the investment bankers for the next debt deal to keep operating. If things go good, stockholders see higher valuation, if not lower valuation. But either way investment bankers get their cut.
Chesapeake Energy Has A Plan - And It's Working [View article]
I am going to try to say something that makes no sense to most people and I don't have the ability to make it understandable. I am going to start by repeating a sentence I posted before. ""We are in a weird place of time where it is not in anybody's vested interest to say that things are not wonderful. To me financialization is a form of monetization. 1n 1951 credit creators of what is now known as credit derivatives earned 8% of the total corporate business, in 1981 it was 13.5%, in 2005 it was 30.2% and now it is over 40% the total corporate business. AM the former CEO of CHK built CHK like the too big to fail banks did with credit financialization, but CHK used natural gas reserves as if it was a currency. Banks like CHK don't have any money. Banks have credit created out of thin air and CHK has natural gas reserves, much of it that will never be profitable to harvest. Most individuals, many companies, cities like Detroit, towns, states and countries are bankrupt. Like CHK, they are stuck in a growing debt trap with no escape route. The only option there is do like Detroit is doing now. Just don't pay the IOU's. Most major corporations, many that are multinationals derive most of their earnings so called, not from selling goods or services, but from speculation. Look at BAC's earnings. Too much of it comes from forclosures they force on people and the US taxpayers where the recent owners property got shorted via credit derivatives and the new owner gets indebted made possible by computer created out of thin air credit derivatives. Our economy is made up of mostly pumping and dumping (long or short) collateralized debt, stock shares, and soon Treasury bonds the FED will dump on the market so it can profit on their short position on it. It is all run through a control grid via mass spying. That is why Obama like Bush had us on the Verizon, AT+T, Google, Facebook and many other entities on the share everything plan through NSA, also called No Such Agency. Today's financial system is made up of credit skullduggery, and outright theft. When you borrow money so called from a bank you exchange the value of the property plus sign a prommissory note in exchange for computer entries that cost the banks $0. That is unethical, unconstitutional and morely wrong. Yet most common people just can't understand it. Absolute power corrupts absolutely. Because of this, there is no such thing as value, profit, or wealth anymore. Everything is just trading IOU's, even the dollar bill is an IOU. Presently most banks operate on a 3% reserve base and are leveraged 33 times their capital base. CHK is leveraged way more then 33 times its capital base. It has stockholders whose equity it uses as collateral. For most banks a 3% loss would wipe out their capital base. CHK has long ago wiped out their capital base. Thus they use the stockholder capital base (holdings) as collateral. What realy bothers me with CHK is their forward sale for future delivery that gets accounted for as earnings when in reality it is an IOU. What bothers me in America is that there are no Americans in America. They are all Federal Reservists, using unconstitutional script called Federal Reserve notes that represent IOU's as a currency. We have become indentured servitudes through the financialization (monetization) of debt.
Chesapeake Energy Has A Plan - And It's Working [View article]
My experience with CHK= CHK drilled a well about 2 miles east of me. They hit some oil on the vertical part then claim the horizontal part went north but is actually west. I beleive the horizontal part got out of the rock formation into salt water. So when they fracked it, the fracking material went into the salt water because it was the easiest place to go under pressure. On the days they did the fracking job my ground water supply to feed the stock tank got warm and bubbly. It stayed that way for better then two weeks. A number of my chickens lost their feathers and later died. CHK told me that my water line and water heater caused my problem. There was no water line or waterheater connected to that water supply. CHK did not even bother to come out and check but the people fracking the well did. The chemical and salt content of my water increased dramatially for a few months. They told me to keep my pump running for a few weeks until they get the stuff they put down the well back up. They ended up pumping the stuff for months to get it out of the well. The highest production they got from the well was 1 barrel of oil per day for about 3 months. They pumped a lot of white stuff down to increase production but that failed. So now 2 years later they pulled out the inside pipe out. Now they are pumping down into the well all of the pond water they build to hold the fracking water. A number of old oil wells around me stopped pumping oil and pumped water instead. Half of them never could fix the problem so had to shut down. Oklahoma Commission told me they had no control over what CHK did or could do.
Chesapeake Energy Has A Plan - And It's Working [View article]
Seems to me we are in a weird place where it is not in anybody's vested interest to say that things are not wonderful. Fact is 80% of excisting US shale plays have already peaked in production with the exception of Marcellas in Pennsylvania and Haynesville in Louisiana. Haynesville is the most unprofitable play to date. Costs are much higher there. It seems to me most natural gas producers are stuck on a production treadmill, where they have to keep drilling like mad just to maintain output. This is not just a CHK problem. WHERE ARE THE RETAINED EARNINGS? Even UPL has that problem. We had a spurt of production that produced a glut and drove prices south. We are slowly working our way out from that production glut and low prices for low prices increased demand. I think going forward demand will increase and production will stay the same. That is a plus. But most natural gas producers are stuck with a lot of IOU's that keep on increasing. CHK has 2 European partners that would like to get their money back somehow and undo their hookups with CHK. They don't want to throw more money into drillng unprofitable wells. They want CHK to sell their position in CHK. They are willing to take a loss but not a humiliating loss.
Chesapeake Energy Has A Plan - And It's Working [View article]
@Craig Cooper - I did not know 2012 is old news. A lot of leases are going to expire worthless unless they can be sold before they expire. 3/4 of their wells are uneconomic at the present price. Price could double and then only half of their wells would be uneconomic. Yes CHK has had some success with oil production increases at Eagle Ford Shale in Texas and the Baken shale in North Dakota. As many as they have drilled you have to hit a few good ones. And going forwards they are going to have to hit a lot of good wells to keep production expanding. But they can't cash flow by production. Buy cheap, sell dear has been their bread and butter and will continue to be. If I was you I would ask CHK for a run down on their well profitability, one by one. There is only about 47,000 of them. They don't do it, instead they go by sections and they don't have many sections that show profits. There is a lot of sections for sale do to lack of profitability. All this could change if natural gas price would double to where it once was. I beleieve it will someday, but can CHK afford to renew their leases for that day? You want me to come up with data and facts that CHK itself won't provide, but you should ask them why most of their production profits comes from less then 10% of the drilled wells. The more I look at this the more I see a reserve pnzi scheme that can't be monetized profitable now or in the near future. It takes a lot of money to keep drilling the deep fence post holes.
Chesapeake Energy Has A Plan - And It's Working [View article]
@Craig Cooper - Why don't you try to get CHK to explain their economics? CHK is approaching a lot of expiring landowners for modifications, amendments, extensions, etc, and when that fails they engage in operations or activity to hold the lease past expiration. Chk's best geologist said, "most wells in our shale plays are uneconomic now and will become more uneconomic in the future as production declines quickly, therefore the most important thing for the company is to hold land for an extended period to gain time to wait for the natural gas prices to rise. For some time now CHK has hyped the performance on wells it wants to sell. Can't really blame them for doing that for you can't tell a prospective buyer the poor performance. Shale Gas has become a ponzi scheme to loot investors wall street style. Enron and CHK have one thing in common, and that is the unwillingnes to explain finances. I also hate their unwillingness to explain their horizontal north drilling that actually goes west right under my land and how they heated my groundwater supply when fracking the worthless well. When you frack a well where the horizontel part hit salt water, plug it and just use the vertical part only. That part actually hit oil. Rock formations are funny, so when you get out of a rock formation and hit water, it makes no sense to frack.....
Chesapeake Energy Has A Plan - And It's Working [View article]
@GamCap LLC - Buy gold no, buy other PM's I'm more of a yes. I prefer good farmland. Yes we have some natural gas/oil/ngls, etc. But at today's prices they are not profitable. It makes a lot more sense to use it here instead of exporting it. Is it wise to use a 10 year supply as fast as possible? I also agree that king dollar will be a very prominant them for the next decade, but not for the reason stated by GamCap. Monetization is a process of converting debt into legal tender credit circulating as money. Governments like most corporations (like CHK) pay down old debt by issuing new debt to raise the funds required to repay down old debt. CHK is like Detroit, it is bankrupt to a point where spending has to be cut. Jack Lew working with Stabilization Fund he has control over is working together with the Federal Reserve to monitize and nationalize the commodity producers. This is especially true with agriculture where the taxpayers are forced to pay the insurance to insure the producers against low prices and low production. What CHK needs is a taxpayer subsidy to insure against low natural gas price.
Chesapeake Energy Has A Plan - And It's Working [View article]
Banks and most other financial institutions use arbitrary methods to leverage their capital base. Most banks are leveraged 33 times their capital base. Altough CHK is not a bank it has leveraged its capital base a lot more then 33 times. With that kind of leverage a 3% loss would wipe them out. Most companies now listed on all stock exchanges derive their wealth from pumping and dumping the bonds or stocks or other debt instruments their own shareholders hold. It is all run through a control grid via mass spying. Today's financial system is build on credit consisting of make believes of financial fraud, skullduggery and theft. CHK needs to come clean on its debts. They are far higher then listed. 3/4 of its wells are uneconomic. A lot of leases will expire worthless. There is one overiding thing that is about to change. Investors are starting to bail out of the bond market because they see that low interest rates has not put the money where it is needed in the real economy. CHK is part of that. They tried to tie up large acerage leases without accounting the cost to hold (renew) the leases. Much of that lease holding money should of have went into drilling to hold by production. Instead they are now forced to put up a for sale sign. CHK has to reduce its costs dramatically and it has to shrink by 75% to stay affloat. CHK is much like the US Government that has to cut spending by simply becoming much smaller. This can only be done with the bond market refusing to refinance the debt. Poloticians like many CEO's just don't have the guts to do it.
Chesapeake Energy Has A Plan - And It's Working [View article]
@Fracjob - we=us, you me and evewrybody else. If we had full employment, there would be a better chance to have incomes that support levels of debt which could be repaid. This goes with individuals or corporations. Right now CHK has $15B long term debt to financial institutions and about $3B worth of delivery obligations into the future. CHK like so many of us have become indentured servitudes because we borrow bank entries instead of money and are forced to pay back in money that does not exist thus are forced to pay in IOU's, in CHK's situation in the form of future delivery already paid for at a fixed price. It is kind of funny how banks loan reserves to each other, well CHK is selling reserves for future delivery at a fixed price, collecting the money now for production to be delivered over a 10 year period. Because of our government debt to private interests we the people are under arbitrary authoritarian rule instead of rule of law. CHK is under arbitrary authoritarian accounting rules set by the very people who own them (not shareholders). Shareholders are last in line for whatever is LEFT.....
Chesapeake Energy Has A Plan - And It's Working [View article]
Ability to sell non core assets. Seems to me they are selling core assets like in Ellis county OK because it was sellable in order to hold on non core assets somewhere else. Seems to me they are selling anything that is sellable. Ability to reduce capital expentitures is now a must. The money is not there, so the spending has to be cut. Their ability to increase production and cash flow will work as long as it is done on paper by selling forward future production cheap to be produced at a later date. Account for it now, produce it later. About as smart as harvesting corn before it is planted. On paper it can be done. But not in reality. 3/4 of their wells are uneconomic. To make them economic, sell forward future production from uneconomic wells. Brilliant. We are under arbitrary authoritarian accounting rules, not rule of real accounting where 1+1=2, nor rule of law. CHK is sitting on way too many acres of expiring leases it can not afford to renew or drill. How about borrowing from the long suffering shareholders instead the GS bankster that simply create the loan as a credit creation entry, where the entry becomes a deposit first and reserve second. We the people need to point one finger on top of our head and one finger on our lower back side and keep turning until we figure out just how stupid we are.
Longleaf Partners Reveal Where Ex-Chesapeake CEO McClendon Lost Their Support [View article]
To me natural gas prices will stay low (under $5) for years to come. Natural gas production in the middle east is growing fast. What was burned off as waste is now being harvested as pipelines become available. To me this is a negative for CHK. The low price for natural gas will force them to sell natural gas assets to gain cash flow that simply can not be gotten from production. 3/4 of their wells are unprofitable. They are presently doing everything possible to sell acerage that is not strategic to them. But in order to sell it it has to have more value to others. And here lies the problem. They are selling good assets instead of the poor assets for nobody wants them. Being in position where you constantly have to sell good assets is not dealing with a position of strength. CHK should be split into two different companies. One as a production company of energy and the other as a holding company of natural gas assets until the price reaches $10. Right now asset sales are not panning out. You can't keep selling stuff for less then what you have in it. Neither can you sell forward natural gas for under $5 to deliver into a 10 year period. To claim that as immediate income now, like they have will drain future income when natural gas price does reach $10. Right now CHK has sold forward way too much natural gas at way too low of a price, and none of the cost associated with this forward selling is being accounted for. I also believe natural gas exports will not materialize. I believe the economy is weakening, thus the government will be forced to step in to stop the natural gas exports to keep the natural gas price from moving much higher. The utilities are already working on that. CHK is sitting on millions of acers of leaseholds that will simply expire, or be sold for less then what they have in it. Since 3/4 of their wells are uneconomic, they will sooner or later be forced to sell them also. As I see it CHK has to downseize dramatically. The only positive thing I see at CHK is that the FED has realized that dropping money on Wall Street does not help Main Street. Since Federal reserve notes are ponzi coupons, the Fed needs to lend those coupons directly to business enterprises. The FED is actually doing that here with CHK on the forward sales of natural gas. But it has to go further. It needs to buy the forward production at a higher price then market price. Right now the FED is refinancing housing debt, student loans and Treasury debt with its QE program. Soon the day will arive when they get stuck with the debt. Then they have to short it to get anything out of it. The present policy of ultra low interest rates is not putting money where it is needed in the real economy. Too much money is going into speculation and little is going into real production of real things. When the bond markets finally realize this, and the bond holders worry about getting their money back instead of chasing yield, yields will rise. Thus interest rates are starting to move higher despite the FED's efforts to keep them low via QE. Presently we save less then 2.5% of our income, and that will not change until savings rates go above 5% like they used to be. This will force banks to be banks not hedge funds like they are now. Right now the derivative books of most US banks are complete opaque and incomprehensible just like CHK'd forward sales are. Until banks become banks, borrowers of savings that get lend out to real enterprises that produce real products, the US economy will continue to shrink, despite all of the so called good news we have been getting on so called improvements. In order for the economy to improve the people have to be able to earn more so they can spend more.
Gold And Markets Married By Fiat: PM Collapse Precedes Markets [View article]
I agree a lot with nannie 1706 except that China will use the yuan to pay domestic workers, use gold as a trade currency with friends and US$'s as a trade currency with enemies. The US QE is benefiting the world's investment class people at the expense of the US taxpayer and those with passbook savings accounts. Right now QE money is flowing into the nifty fifty stocks that are borrowing a lot of money to expand in China and other areas. Our corporations are expanding their workforce everywhere else but in the USA. We have a massive problem of how to get marginal manufacturing projects profitable. Ethanol will never be profitable because it takes a gallon of real fuel to make 3/4 gallon of ethanol. We would be better off growing pigweed on marginal land to make plastic like France does. Sustained pricing is needed to stimulate investment in marginal projects. There has to be an inventory that can be delivered to the market when economics support it. In many European alps veal as heavy as 800 lbs from milk fed to calves grown in the open is exported for $12 lb., to the USA. We should be doing that here, instead of trying to get $1.20 for a 1000 + lb animal. The biggest problem the USA has is its expanding debt called money. No US$'s enter into circulation debt free, thus the debt has to expand. And most of that expantion is presently flowing to China. Funny how a fiat system always builds up a country that we later have to fight in order to reduce the population. As for stocks right now I am nibbling on IAG, MUX mostly. I buy cheap, hope it goes up 10% and sell and do it an average of once or twice every month. Buy MUX when it goes under $2, IAG under $5.
Chesapeake's Improved Efficiencies And Liquids Focus Will Lift Margins [View article]
Chesapeake's Improved Efficiencies And Liquids Focus Will Lift Margins [View article]
Chesapeake's Improved Efficiencies And Liquids Focus Will Lift Margins [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
CHK drilled a well about 2 miles east of me. They hit some oil on the vertical part then claim the horizontal part went north but is actually west. I beleive the horizontal part got out of the rock formation into salt water. So when they fracked it, the fracking material went into the salt water because it was the easiest place to go under pressure. On the days they did the fracking job my ground water supply to feed the stock tank got warm and bubbly. It stayed that way for better then two weeks. A number of my chickens lost their feathers and later died. CHK told me that my water line and water heater caused my problem. There was no water line or waterheater connected to that water supply. CHK did not even bother to come out and check but the people fracking the well did. The chemical and salt content of my water increased dramatially for a few months. They told me to keep my pump running for a few weeks until they get the stuff they put down the well back up. They ended up pumping the stuff for months to get it out of the well. The highest production they got from the well was 1 barrel of oil per day for about 3 months. They pumped a lot of white stuff down to increase production but that failed. So now 2 years later they pulled out the inside pipe out. Now they are pumping down into the well all of the pond water they build to hold the fracking water. A number of old oil wells around me stopped pumping oil and pumped water instead. Half of them never could fix the problem so had to shut down. Oklahoma Commission told me they had no control over what CHK did or could do.
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
Chesapeake Energy Has A Plan - And It's Working [View article]
If we had full employment, there would be a better chance to have incomes that support levels of debt which could be repaid. This goes with individuals or corporations. Right now CHK has $15B long term debt to financial institutions and about $3B worth of delivery obligations into the future. CHK like so many of us have become indentured servitudes because we borrow bank entries instead of money and are forced to pay back in money that does not exist thus are forced to pay in IOU's, in CHK's situation in the form of future delivery already paid for at a fixed price. It is kind of funny how banks loan reserves to each other, well CHK is selling reserves for future delivery at a fixed price, collecting the money now for production to be delivered over a 10 year period. Because of our government debt to private interests we the people are under arbitrary authoritarian rule instead of rule of law. CHK is under arbitrary authoritarian accounting rules set by the very people who own them (not shareholders). Shareholders are last in line for whatever is LEFT.....
Chesapeake Energy Has A Plan - And It's Working [View article]
Longleaf Partners Reveal Where Ex-Chesapeake CEO McClendon Lost Their Support [View article]
Gold And Markets Married By Fiat: PM Collapse Precedes Markets [View article]