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Chesapeake Energy: An Opportunity To Generate Profits For Investors

Aug. 03, 2018 8:04 PM ETChesapeake Energy Corporation (CHK)73 Comments
Steven Fiorillo profile picture
Steven Fiorillo


  • Chesapeake will have eliminated $12.2 billion in total leverage over the past five years.
  • Chesapeake will retire the debt obligations for 2018, 2019, and 2020 completely and just over 53% of the debt owed in 2021.
  • Anticipating oil volumes to increase by 10% in 2019.
  • Beginning development in the Austin Chalk and Upper Eagle Ford.

If Chesapeake Energy (NASDAQ:CHK) was a technology company they would be celebrated and put on a pedestal. Chesapeake operates in a sector which hasn’t been attractive for quite some time, yet the energy sector is essential to not only the global economy but every person’s way of life. Unlike products and services which could be phased out or flat out, replaced energy is a constant which will always be needed. If you were to spend some time and really research everything Chesapeake has done since Mr. Lawler took the helm, you would think this is a broken stock which provides a golden opportunity not a broken company. Sooner or later, more upgrades will follow Bank of America (BAC), and the market will fairly evaluate Chesapeake’s true value. Warren Buffett once said it is wise to be fearful when others are greedy and greedy when others are fearful. This is a time to be an investor for the long haul with Chesapeake because all the progress which has been made can’t be negated much longer.

Anyone selling Chesapeake at these levels or expressing negative views didn’t listen to the same conference call that Mr. Lawler delivered

On May 23rd, my first article on Chesapeake was published titled A True Turnaround Story With Exceptional Upside Potential, and this conference call solidified my thesis. With the closure of the Utica transaction, which is slated for Q4, Chesapeake will have eliminated $12.2 billion in total leverage over the past five years. Their annual gathering, processing, and transportation expenses will have decreased by approximately $900 million. CapEx will have been cumulatively reduced by more than $12 billion, while over $1 billion in annual cash costs will have been eliminated. This is remarkable for a five-year span which included a collapse in oil prices.

Debt cast

This article was written by

Steven Fiorillo profile picture
I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha or https://dividendincomestreams.substack.com/

Analyst’s Disclosure: I am/we are long CHK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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