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THE Chesapeake Energy Thread (merged)

General discussions of the systemic, societal and civilisational effects of depletion.

Re: THE Chesapeake Energy Thread (merged)

Unread postby vox_mundi » Wed 08 Jun 2016, 17:46:03

Medical Examiner report finds McClendon died of an accidental car crash

Oklahoma City businessman Aubrey McClendon died of an accidental car crash, according to a medical examiner report released Wednesday.

The autopsy report listed the cause of death as multiple blunt force trauma to the torso and extremities due to motor vehicle collision. The manner of death is listed as an accident.

The toxicology report showed no evidence of alcohol or carbon monoxide in McClendon's blood. The report said doxylamine was detected, but not confirmed, in McClendon's liver. Doxylamine is an antihistamine found in some cold and allergy medication.

The medical examiner's report came one day after the Oklahoma City Police Department confirmed that its homicide investigation "found no information that would indicate anything other than a vehicular accident," police spokesman Capt. Paco Balderrama said Tuesday.

The police report was turned over to the medical examiner late last month, following a two-month investigation.

Co-founder of Chesapeake Energy Corp. and founder of American Energy Partners LP, McClendon died in a car crash March 2, one day after a federal grand jury indicted him on charges of conspiring to rig bids for oil and natural gas leases in northwest Oklahoma. Those charges were dismissed after the car crash.

The police completed their accident investigation two weeks after the crash. That investigation revealed McClendon's 2013 Chevrolet Tahoe was traveling 88 mph five seconds before the impact and that it hit the concrete wall at 78 mph. McClendon was not wearing a seat belt.

The vehicle veered left of center nearly 200 feet before crashing into the wall, the accident report stated. The vehicle's crash data box also revealed that McClendon tapped the brake pedal, but did not attempt to slow just before the crash, Oklahoma City Police Chief Bill Citty said in March.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby Cog » Wed 08 Jun 2016, 18:24:15

I played the volatility game with CHK stock once too many times and am stuck with some $6.45/share stock. Current price is $4.98/share. I don't like losses.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby yellowcanoe » Wed 08 Jun 2016, 18:45:24

Cog wrote:I played the volatility game with CHK stock once too many times and am stuck with some $6.45/share stock. Current price is $4.98/share. I don't like losses.


It could be worse -- there have been plenty of mining frauds where investors lost everything. The Bre-X scandal is the most recent one I can recall. I was at the site of a former gold mine with our Earth Sciences Field School in late April. The original owners of the site had build a powerhouse on a nearby river, sunk shafts, dug out ore and started work on a stamping mill to process the ore at which point the promoter ran off with the remaining funds. That was a long time ago and other companies have examined the property since then but it is likely that the property hasn't yielded a single ounce of gold!
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Re: THE Chesapeake Energy Thread (merged)

Unread postby ROCKMAN » Wed 08 Jun 2016, 20:46:18

Cog - Be thankful Aubry died: it was $1.60 before his "accident". And no one can read the police report and not believe it was anything but suicide.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby toolpush » Thu 09 Jun 2016, 03:12:03

yellowcanoe wrote:
Cog wrote:I played the volatility game with CHK stock once too many times and am stuck with some $6.45/share stock. Current price is $4.98/share. I don't like losses.


It could be worse -- there have been plenty of mining frauds where investors lost everything. The Bre-X scandal is the most recent one I can recall. I was at the site of a former gold mine with our Earth Sciences Field School in late April. The original owners of the site had build a powerhouse on a nearby river, sunk shafts, dug out ore and started work on a stamping mill to process the ore at which point the promoter ran off with the remaining funds. That was a long time ago and other companies have examined the property since then but it is likely that the property hasn't yielded a single ounce of gold!



Yeah, at Bre-X they commit suicide by falling out of helicopters!

https://en.wikipedia.org/wiki/Bre-X

The fraud began to unravel rapidly on March 19, 1997 when Filipino Bre-X geologist Michael de Guzman committed suicide by jumping from a helicopter in Busang, Indonesia.[5][6] His body was found four days later in the jungle, mostly eaten by animals and identified from molars and a thumbprint.


I suppose that is what the witnesses would have said,to protect their own arses! Remember Tommy Suharto, the son of the then President, was also caught in the sting.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby GoghGoner » Tue 07 Mar 2017, 08:08:52

Looks like Aubrey McClendon ran his personal finances like that of his companies.

Billionaire Energy CEO Might Have Died A Penniless Pauper

Read more: http://dailycaller.com/2017/03/03/billi ... z4ae3BsP8o


Looks like CHK's production peaked in 2014 and I don't see how they get the credit for another surge. I still think this company will file bankruptcy at some point. They are still the top shale ng producer in the US by a significant margin although Cabot and Anadarko were catching up quickly.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby Tanada » Tue 07 Mar 2017, 08:22:02

GoghGoner wrote:Looks like Aubrey McClendon ran his personal finances like that of his companies.

Billionaire Energy CEO Might Have Died A Penniless Pauper

Read more: http://dailycaller.com/2017/03/03/billi ... z4ae3BsP8o


Looks like CHK's production peaked in 2014 and I don't see how they get the credit for another surge. I still think this company will file bankruptcy at some point. They are still the top shale ng producer in the US by a significant margin although Cabot and Anadarko were catching up quickly.


It is always difficult to predict the future, if CHK management makes the right decisions they will stay on top of the heap, on the other hand a series of less well timed/directed decisions and they will be Bankrupt.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby ROCKMAN » Tue 07 Mar 2017, 11:17:33

Just a friendly reminder: using the phrase "filling bankruptcy" sounds like you're saying something meaningful but you really aren't. A bankruptcy filling is often just a forced reorganization of debt after which the company carries on business. But there are bankruptcies that do lead to the dissolution of a company with its assets sold off to satisfy at least a portion of its debt.

But such a dissolution of Chesapeake is very unlikely especially at the current price of oil. The most likely scenario for the company is to have control of much/all of its stock acquired by another pubco...like ExxonMobil. Remember regardless of its debt: the company is targeting total production of 200 million barrels of oil equivalent (mmboe) in 2017, or average daily production of 545 thousand barrels of oil equivalent (mboe). It also has a planned total capital expenditures (including capitalized interest) in the range of $2.2 billion in 2017, compared to total capital expenditures of approximately $1.70 billion in 2016, excluding 2016 proved property acquisitions and the repurchase of volumetric production payment (VPP) transactions.

IOW the GROSS value of CHK is huge: that ain't gonna disappear. And if another company swoops in to capture it that company will take over the debt on the basis of the NET value of CHK. Remember the huge acquisition of XTO a few years ago by ExxonMobil? XTO didn't disappear...it still exists. It just happens to be owned 100% by XOM.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby GoghGoner » Tue 07 Mar 2017, 11:25:04

I think the filing of bankruptcy is important since it changes the way the company has to approach the future. A debt-free CHK is going to behave much differently than a CHK that has to produce revenue to pay on debt. CHK could throttle back since the prices suck right now but they will not because they have to have the revenue. Their reckless spending habits are a detriment to the whole industry.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby ROCKMAN » Tue 07 Mar 2017, 12:15:24

Goner - "Their reckless spending habits are a detriment to the whole industry.' And that's the $64,000 question, eh? Reckless spending habits that ARE a detriment to the whole industry or WERE a detriment to the whole industry? Have you seen any analysis of how CHK is conducting its business today from any source you consider credible? I haven't seen one. For all I know CHK might be one of the best managed companies in the oil patch today. After all so far the new management has survived the nightmare that Aubrey McClendon designed for the company even before the oil price crash.

And not that Wall Street is always right but over the last 13 month Chesapeake stock has risen 230%. Find another oil company that has shown that improvement in the last year. Makes you wish you had converted your life savings into CHK in Feb 2016, eh? LOL.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby rockdoc123 » Tue 07 Mar 2017, 16:17:06

Have you seen any analysis of how CHK is conducting its business today from any source you consider credible? I haven't seen one. For all I know CHK might be one of the best managed companies in the oil patch today. After all so far the new management has survived the nightmare that Aubrey McClendon designed for the company even before the oil price crash.


I spent a bit of time pouring through their financials as well as their latests presentation. And before we see some yahoo declaring that "they are lying" remember that because CHK is publicly traded every statement made in public whether it be in submissions to the SEC or presentations to investors or press releases is closely monitored by the SEC. The penalties are significant for saying anything that is not accurate.

When I went through all of their information it struck me this is a company that took it pretty hard on the chin with the price downturn but have been very reactive to the challenges and have now set themselves up to move forward at a low price environment. I would disagree that McClendon set them up....what he did was build a huge company on the backs of a debt load that was easily sustainable at prices anywhere north of $60/bbl. Once prices dropped below that the drilling commitments and carrying costs created a huge challenge putting them into negative cashflow for the short term. In 2016 CHK sold off marginal properties and retired debt with a total effect of lowering their total leverage by 50% ($11.2 billion). That alone would account for somewhere between $80 and $100 MM cash not required to service debt on an annual basis. They also note they have cut cash costs by ~50% per boe and have high-graded their lands to those holding the best ROR potential. CHK says they are set to deliver annually $225 MM free cash based on current prices and with a substantive land base are positioned to grow production quickly if prices improve. They are obviously looking to cover off the downside having hedged 68% of their oil production with swaps at $50.19/bbl and 71% of their gas at prices between $3.00 and $3.48/Mcf NYMEX.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby Plantagenet » Tue 07 Mar 2017, 16:29:37

ROCKMAN wrote: Makes you wish you had converted your life savings into CHK in Feb 2016, eh? LOL.


That would've been WAAAAY too risky but I took a position in CHK and then sold at the end of 2016.

I'm sitting tight for now. The market (and CHK) seems very pricey here to me
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Re: THE Chesapeake Energy Thread (merged)

Unread postby GoghGoner » Wed 08 Mar 2017, 06:44:20

Yes, selling off "marginal" assets! Everybody uses that term, it is so ridiculous.

Their deficit b/w Capex and cash flow was about 2 billion USD last year. That's a lot of blood. If they didn't owe so much money, the banks would have cut them off by now.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby ROCKMAN » Wed 08 Mar 2017, 09:57:50

Goner - Selling off "marginal assets", in addition to monetizing assets that aren't going to generate much revenue, can often be code for reducing overhead by laying off the staff that would have handled those projects. Win/win: a bit a cash influx and lower employee budget. I assume the reason for the huge surge (230%) in its stock price over just 13 months isn't solely due to improved operations but also due to a lot of folks like you who undervalued the company based on past activities. Always good to remember that often a stock's price isn't base upon its actual value but the perception of investors. But eventually the pros determine what a company's worth really is and they'll take advantage of that erroneous low valuation. As said above there's always risk. Which is why the pros hunt for those stocks that have taken a "perception hit" as opposed to a "true value hit". And thus some funds made a huge profit buying the stock of a company "on the verge of bankruptcy". Which is often a spot light the pros look for: such weakness also makes that company a prime acquisition target. Which alone would produce "premium price" bid.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby rockdoc123 » Wed 08 Mar 2017, 12:08:34

Yes, selling off "marginal" assets! Everybody uses that term, it is so ridiculous.


having worked in the industry through a number of downturns I can say for a fact it is hardly "ridiculous". For all companies it is true that "one mans trash is another mans treasure". The term marginal asset simply reflects how that asset stands up in a companies portfolio with respect to IRR, free net-cashflow, liabilities etc. A company looking to reduce it's debt will look at the bottom part of its portfolio and sell or farmout which accomplishes two things: 1. it generates capital to be reinvested or pay down debt and 2. it focuses their efforts on the best performing parts of a portfolio. The buyer of the asset in most cases sees a means by which they can generate more value. As an example some land that is the bottom of the portfolio of a company such as CHK might very well fit into the upper part of a portfolio of a small company that is looking for an entry into a particular play. This is why I have said a few times before that low prices are often helpful to the industry as it eliminates poor performers and puts assets in the hands of those who can get the most out of them. There are many stories out there of successful companies who started out buying lands or production from a large company who didn't see the value or the value proposition didn't stand up against their other investments.


Their deficit b/w Capex and cash flow was about 2 billion USD last year. That's a lot of blood. If they didn't owe so much money, the banks would have cut them off by now.


You probably shouldn't be investing in oil and gas shares at all if this is how you read their financials. This from their press release on 4th quarter results:

Chesapeake reported a net loss available to common stockholders of $4.881 billion, or $6.39 per share, while the company's ebitda for the 2016 full year was a loss of $3.142 billion. The primary drivers of the net loss were noncash impairments of the carrying value of Chesapeake's oil and natural gas properties totaling $2.520 billion, largely resulting from decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices used in the company's impairment calculations, Barnett Shale exit costs of approximately $645 million and unrealized hedging losses of $818 million as prices marginally recovered. Adjusting for these and other items that are typically excluded by securities analysts, the 2016  full year adjusted net loss available to common stockholders was $138 million, or $0.05 per common share, while the company's adjusted ebitda was $1.339 billion in the 2016 full year. 


As well I already pointed out that in 2016 they dropped their overall debt by ~50%. With their current adjusted EBITDA a reasonable estimate of carrying costs on the remaining debt would be somewhere less than 10% which is certainly manageable if prices don't drop below current level for the rest of the year.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby Plantagenet » Sun 28 Jun 2020, 19:00:25

Chesapeake Energy just filed for bankruptcy. The stock had been in trouble for years and now its over. Time to dump CHK in the trash and move on.

fracking-pioneer-chesapeake-energy-files-for-bankruptcy-2020-06-28

Low energy prices are crushing the US oil industry and the frackers are particularly at risk because of their high production costs. I predict Chesapeake will be followed by more bankruptcies in the fracking sector.

Good old Pstarr was always talking about buying CHK. I warned him against it---Hope you got out OK, Pstarr.

In fact I hope everybody who was in CHK or the other fracking stocks got clear and sold off their fracking stocks a few years ago. I had some Pioneer but sold out years ago with a small profit before things went south.

If anyone is still invested in fracking stocks take the CHK bankruptcy as a warning---these stocks are in deep trouble and more bankruptcies are coming.

Good luck to all.

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Re: THE Chesapeake Energy Thread (merged)

Unread postby coffeeguyzz » Mon 29 Jun 2020, 01:52:59

Might be interesting to see how the few knowledgeable commentators on this site respond to Chessy's long anticipated Chapter 11.
The above comment leads me to think that most people have no clue what a Chapter 11 proceeding is (especially a pre pack, like this one seems to be) versus a Chapter 7.
For the serious amongst us, some entity (ies) may be acquiring some outstanding assets for rock bottom costs.
While Chessy's foray into liquid production via the Wildhorse purchase was wildly ill timed, their ongoing operations in the Powder River Basin and NEPA are more than respectable.
Observers awaiting to see how the assets were/are divvied up may be disappointed as little on the ground change appears - for now - to be forthcoming.
If the new corporate structure enables status quo operations with $7 billion debt removed, this outfit may be a strong company going forward.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby GoghGoner » Mon 29 Jun 2020, 11:10:42

Planty is factually correct in his post, you can go back a reread guyz. CHK stock is done for and anybody who invested in it got walloped. Sure new stock will be issued and a new round of suckers will partake.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby coffeeguyzz » Mon 29 Jun 2020, 12:16:08

GG
"The frackers.(sic) are particularly at risk because of their high production costs."
"Time to dump CHK in the trash and move on".

In April, Chesapeake produced just over 2 1/2 Bcfd in Pennsylvania from 871 wells.
In June, in September, Chessy will still be producing roughly that amount only not being burdened with the present $9 billion in debt.
Along with the massive haircut the equity owners will continue to suffer, existing contracts (read pipelines and drilling contractors, especially) are in a vulnerable position regarding payments.

Bankruptcy proceedings are inherently an ugly state of affairs, but to mis perceive that hydrocarbon output will be drastically reduced (ended?) when these companies restructure is simply not what happens.
About 2/3 years back - on this very site - Rockman did an outstanding review of several operators who declared BK after the 2015/6 meltdown.
Vast majority showed ongoing production from the assets either under leaner corporate structures or different entities altogether.

Bottom line regarding output ... it just keeps chugging along.

That is how this stuff works.
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Re: THE Chesapeake Energy Thread (merged)

Unread postby Plantagenet » Mon 29 Jun 2020, 15:58:26

coffeeguyzz wrote:
Bankruptcy proceedings are inherently an ugly state of affairs, but to mis perceive that hydrocarbon output will be drastically reduced (ended?) when these companies restructure is simply not what happens.


You're the only person who's mentioned that ridiculous idea.

coffeeguyzz wrote:Bottom line regarding output ... it just keeps chugging along.


Of course.

The assets of the bankrupt company will be sold off to pay outstanding debts. This includes producing oil and gas fields. Thats how it works.

But that is small comfort for those people who invested in CHK stock---they are now wiped out.

AND People who are invested in other fracking stocks would be wise to take this opportunity to reevaluate their stock holdings in this sector, as additional bankruptcies may be coming.

Do you get it now?

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