plato1976 Posted February 24, 2014 Share Posted February 24, 2014 Will this unit be worth so much so that it can close the "funding gap" ? Thoughts on divestiture of the oilfield services biz and the potential buyers for the unit? I would much prefer a cash sale to spin-off in order to get rid of the "funding gap" issue once and for all. Link to comment Share on other sites More sharing options...
txlaw Posted February 24, 2014 Share Posted February 24, 2014 Will this unit be worth so much so that it can close the "funding gap" ? Thoughts on divestiture of the oilfield services biz and the potential buyers for the unit? I would much prefer a cash sale to spin-off in order to get rid of the "funding gap" issue once and for all. Yes. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted February 24, 2014 Share Posted February 24, 2014 I would spin it off. This would hurt Chesapeake's credit rating, lowering the price on its debt. Then Chesapeake could go out and repurchase its debt. *I don't know if they have the liquidity to do this. 2- In the past, Chesapeake was very, very good at financial engineering. They've done some smart stuff in: a- Taking collateral away from secured bondholders in the VPP and Utica preferred deals. b- Midstream deals are extremely favorable to Chesapeake. There is hidden value here. c- Some hidden value in the drilling carries. Link to comment Share on other sites More sharing options...
phil_Buffett Posted February 26, 2014 Share Posted February 26, 2014 http://finance.yahoo.com/news/chesapeake-energy-corporation-reports-financial-120100978.html Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 12, 2014 Share Posted March 12, 2014 Chesapeake Accused of Underpaying Gas Royalties Outcry Prompts Pennsylvania Governor to Call for Investigation http://online.wsj.com/news/articles/SB10001424052702304071004579407572017346590?mod=WSJ_hp_EditorsPicks&mg=reno64-wsj Link to comment Share on other sites More sharing options...
argonaut Posted April 18, 2014 Share Posted April 18, 2014 The value of CHK continues to rise according to Southeaasterns recent letters 1) Chesapeake Energy was the largest contributor in 2013, up 59%. Together with new CEO Doug Lawler, the board that we helped seat in 2012 is instilling financial and operating discipline into the company. Over the last 19 months, the company reduced SG&A, sold a number of non- core assets, decreased capex, and committed to livingwithinitscashflowin2014.Thecompanyis focusing on its strong assets in the Eagle Ford, Marcellus, and Utica plays in order to grow production profitably. Even after the stock’s gains, Chesapeake’s oil and gas reserves sell for a discount to our appraisal. That appraisal would grow significantly in the long-term bull case for low cost natural gas replacing coal for power generation, fostering manufacturing renewal in the U.S., displacing some oil as a transportation fuel, and becoming a major export. 2) Energy company Chesapeake retreated 5% in the quarter following a strong 2013. Short-term questions about production levels, the mix between gas and liquids, and additional asset sales pressured the stock. Our appraisal, however, grew slightly due to successful cost reductions. CEO Doug Lawler has made substantial progress since taking the helm last year, and we believe his capital discipline and operational effectiveness will reward shareholders. Link to comment Share on other sites More sharing options...
wbr Posted May 7, 2014 Share Posted May 7, 2014 Q1 2014 Earnings: http://www.chk.com/news/articles/Pages/1928033.aspx Highlights include: -Strong Cashflow -Strong volume in liquids -Strong pricing -Production costs down 8% and G&A expenses down 27% y/y Link to comment Share on other sites More sharing options...
argonaut Posted May 19, 2014 Share Posted May 19, 2014 Has anyone done a valuation for the proposed spinoff company based upon the proposed financials? Link to comment Share on other sites More sharing options...
stahleyp Posted June 9, 2014 Share Posted June 9, 2014 Chesapeake Spins Off Oilfield services company http://www.marketwatch.com/story/chesapeakes-board-of-directors-approves-spin-off-of-companys-oilfield-services-business-2014-06-09?reflink=MW_news_stmp Link to comment Share on other sites More sharing options...
muscleman Posted June 27, 2014 Share Posted June 27, 2014 Chesapeake Spins Off Oilfield services company http://www.marketwatch.com/story/chesapeakes-board-of-directors-approves-spin-off-of-companys-oilfield-services-business-2014-06-09?reflink=MW_news_stmp I looked into CHK's filings but didn't find a separated statements for SSE. Do you understand that business? Should I sell or hold it when I receive the spin off? Link to comment Share on other sites More sharing options...
loganc Posted June 27, 2014 Share Posted June 27, 2014 Chesapeake Spins Off Oilfield services company http://www.marketwatch.com/story/chesapeakes-board-of-directors-approves-spin-off-of-companys-oilfield-services-business-2014-06-09?reflink=MW_news_stmp I looked into CHK's filings but didn't find a separated statements for SSE. Do you understand that business? Should I sell or hold it when I receive the spin off? First, I believe you can find the SEC filings for the oilfield services spinoff here: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001532930&owner=exclude&count=40&hidefilings=0 In terms of the question about the decision to buy, sell or hold the spinco, it is obviously going to depend on price. I have been meaning to do more work on this, but I have been distracted by other ideas. As such, I haven't extensively reviewed the filings. Based on my cursory work, I am not very impressed by the business. As one should expect, it is quite capital intensive and the drilling/services contracts (and hence revenues) are predominantly with CHK. This seems like a fairly large risk factor to me as I am unsure as to how much negotiating leverage the spinco will have with CHK. I am certainly interested to hear any other thoughts. Link to comment Share on other sites More sharing options...
Evolveus Posted June 28, 2014 Share Posted June 28, 2014 I think part of the upside opportunity is for spinco to be able to pursue business outside of the chk contracts thus bolstering revs and lowering customer concentration risk. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted June 28, 2014 Share Posted June 28, 2014 If you look at the way that CHK and ACMP (Access midstream, formerly Chesapeake something or other) are structured, things were structured in favour of CHK. ACMP is fairly silly as it has entered into risky deals with Chesapeake where ACMP is levered to how many wells Chesapeake drills. Chesapeake may be trying to structure the deal so that the oil services company has a deceptively high yield so that retail investors (and yield-hungry investors) will overpay for it. If you look at ACMP, silly stocks have done well in the past few years. But I think the party will one day come to an end and these things will be valued based on their intrinsic value (e.g. look at the royalty trusts that Chesapeake and Sandridge spun out). Link to comment Share on other sites More sharing options...
Chalk bag Posted June 30, 2014 Share Posted June 30, 2014 Chesapeake Spins Off Oilfield services company http://www.marketwatch.com/story/chesapeakes-board-of-directors-approves-spin-off-of-companys-oilfield-services-business-2014-06-09?reflink=MW_news_stmp I looked into CHK's filings but didn't find a separated statements for SSE. Do you understand that business? Should I sell or hold it when I receive the spin off? First, I believe you can find the SEC filings for the oilfield services spinoff here: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001532930&owner=exclude&count=40&hidefilings=0 In terms of the question about the decision to buy, sell or hold the spinco, it is obviously going to depend on price. I have been meaning to do more work on this, but I have been distracted by other ideas. As such, I haven't extensively reviewed the filings. Based on my cursory work, I am not very impressed by the business. As one should expect, it is quite capital intensive and the drilling/services contracts (and hence revenues) are predominantly with CHK. This seems like a fairly large risk factor to me as I am unsure as to how much negotiating leverage the spinco will have with CHK. I am certainly interested to hear any other thoughts. Seems like a levered version of PTEN w/ lower margins. Me think the tier 1 rigs coming online the next 2 years should help Drilling upside (also if they expand day rate margin up to 8.5-9k +), but aside from that I see them just doing ~$530-540 mm EBITDA for FY15, rendering the stock @ ~5x. Hardly cheap when all their comps are around 5.1-5.5x, and this company has a huge debt burden w/ no FCF to boot until 2016. Please prove me wrong. Don't see why you go long this. Link to comment Share on other sites More sharing options...
muscleman Posted July 1, 2014 Share Posted July 1, 2014 Thank you for your advice. I sold the SSE shares today. :) Link to comment Share on other sites More sharing options...
muscleman Posted July 7, 2014 Share Posted July 7, 2014 http://online.wsj.com/articles/new-york-towns-and-cities-can-ban-fracking-court-rules-1404145435 Does anyone have insights into this ruling? How much impact will there be? Link to comment Share on other sites More sharing options...
colinwalt Posted July 7, 2014 Share Posted July 7, 2014 http://www.bloomberg.com/video/what-ny-anti-fracking-ruling-means-for-industry-5Tjkw~K6R3utDMSfid5I0Q.html Link to comment Share on other sites More sharing options...
muscleman Posted August 12, 2014 Share Posted August 12, 2014 Q2 is out. http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=10134597-829-482063&type=sect&TabIndex=2&companyid=1021&ppu=%252fdefault.aspx%253fsym%253dCHK Link to comment Share on other sites More sharing options...
undervalued Posted October 13, 2014 Share Posted October 13, 2014 Anyone knows what kind of affect $80 oil will have on CHK? Are the fear in the market place overblown? Link to comment Share on other sites More sharing options...
muscleman Posted October 13, 2014 Share Posted October 13, 2014 Anyone knows what kind of affect $80 oil will have on CHK? Are the fear in the market place overblown? CHK's oil production costs are around $75 if I remember correctly. So $95 oil vs 80 makes a big difference. Link to comment Share on other sites More sharing options...
Guest wellmont Posted October 13, 2014 Share Posted October 13, 2014 Seems like a levered version of PTEN w/ lower margins. Me think the tier 1 rigs coming online the next 2 years should help Drilling upside (also if they expand day rate margin up to 8.5-9k +), but aside from that I see them just doing ~$530-540 mm EBITDA for FY15, rendering the stock @ ~5x. Hardly cheap when all their comps are around 5.1-5.5x, and this company has a huge debt burden w/ no FCF to boot until 2016. Please prove me wrong. Don't see why you go long this. these guys are supposed to be sharp and bought around 6% of it in the $23 range. :) http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001172661-14-001505%2Etxt&FilePath=%5C2014%5C08%5C25%5C&CoName=SEVENTY+SEVEN+ENERGY+INC%2E&FormType=SC+13G&RcvdDate=8%2F25%2F2014&pdf= Link to comment Share on other sites More sharing options...
zenith Posted October 16, 2014 Share Posted October 16, 2014 Longleaf partners comments on CHK While lower energy prices rather than company-specific disappointments in our energy names drove declines, they did not impact our appraisals of these three companies because our models already incorporated lower commodity prices based on the futures curve pricing and the marginal cost of production in our various plays. Higher commodity prices would likely lift their stocks, but these three companies do not require a rise in energy prices for intrinsic values to be recognized. At Chesapeake, CEO Doug Lawler is continuing to drive value recognition in ways he can control — selling non-core assets at reasonable prices, reducing debt, and increasing operating efficiencies in both corporate and production activity. He is building additional upside with $2-3 billion of annual discretionary capital spending that management projects should deliver strong returns on capital, even without higher commodity prices Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 16, 2014 Share Posted October 16, 2014 you guys like the sale? Chesapeake Gains Most Since 2008 on Biggest Shale Sale http://www.bloomberg.com/news/2014-10-16/chesapeake-to-divest-appalachian-shale-fields.html Chesapeake Energy Corp. (CHK) surged the most in almost six years after announcing plans to sell natural gas and oil shale fields to Southwestern Energy Co. (SWN) for $5.4 billion in its biggest-ever divestment. The transaction includes 1,500 wells and drilling rights across 413,000 acres in the southern Marcellus Shale and eastern Utica Shale in Pennsylvania and West Virginia, Oklahoma City-based Chesapeake said in a statement today. Link to comment Share on other sites More sharing options...
Zorrofan Posted November 3, 2014 Share Posted November 3, 2014 Quarterly results out tomorrow morning, should be interesting. There has been a lot of hard work done the past year to clean things up, coupled with this latest asset sale to reduce leverage things may start to look up for the company....of course oil price plunge doesn't help but they have hedged oil & nat gas prices...... cheers Zorro Link to comment Share on other sites More sharing options...
Zorrofan Posted February 4, 2015 Share Posted February 4, 2015 CHK holding up well today in the face of the renewed drop in oil/nat gas prices. Wonder if this is short covering or is someone building a position prior to a takeover offer?? always interesting :-\ cheers Zorro Link to comment Share on other sites More sharing options...
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