Chesapeake Energy sues founder Aubrey McClendon

Chesapeake Energy (NYSE:CHK), the second largest natural gas producer in the U.S., is suing its founder and former CEO Aubrey McClendon, accusing him of stealing confidential information to benefit his other investments.

What’s Next for Chesapeake Energy Following Its Huge Asset Sale?

This article was originally published by TheStreet on October 28, 2014

By Sarfaraz A. Khan

NEW YORK (TheStreet) -- Chesapeake Energy (CHK) , the second-largest natural-gas and 10th-largest oil producer in the United States, which was on the brink of bankruptcy just two years ago, has found a way to fix its high levels of debt and also possibly take advantage of weak oil prices to make a major acquisition.

The Oklahoma City-based company became one of the biggest players in the U.S. natural-gas sector on the back of the shale gas boom, but its growth was driven largely by debt.

EOG Resources: Should You Sell The Best American Shale Oil Stock At 52-Week High?

This article was originally published by Seeking Alpha on July 22, 2014.

Summary: EOG Resources is currently trading close to its 52-week high. EOG Resources has four key strengths that sets it apart from its competitors. Let's take a look at its production growth plans and valuation.

The shares of EOG Resources EOG have rallied this year and are currently trading close to its 52-week high of $118.89. Does this mean that investors should cash out on their investments? To find out, let's dig deeper.

EOG Resources is one of the leading independent energy companies of the U.S, with total estimated net proved reserves of 2.1 billion barrels of oil equivalents. The company's growth has been driven by the shale revolution.

Focus on Oil

What sets EOG Resources apart from other energy companies is that firstly, unlike some of its peers such as Devon Energy DVN and Chesapeake Energy CHK, whose growth has been driven by the shale gas boom, EOG Resources has largely focused on shale oil. As a result, EOG Resources has been immune from the downward trend in the gas industry coming from the glut in prices which nearly drove Chesapeake to bankruptcy and forced the transformation of Devon Energy.

Diverse Portfolio

Secondly, there aren't a lot of shale-oil focused energy companies out there whose reserve portfolio is as diversified as EOG Resources. Most of the companies in this sector are mainly producing oil from a one or two shale plays. For instance, Continental Resources CLR, another unconventional oil producer, is a  …. Read full article at Seeking Alpha.

     

Continental Resources and EOG Are the Big Winners of the Shale Boom

This article was originally published by TheStreet on July 10, 2014. 

By Sarfaraz A. Khan

NEW YORK (TheStreet) -- The U.S. is on track to become the biggest oil producer on the planet, surpassing Russia and Saudi Arabia thanks to the shale revolution.

Oil majors Exxon Mobil (XOM_) and Chevron (CVX_) have failed to capitalize on the shale boom, playing second fiddle to their relatively smaller exploration and production peers Devon Energy (DVN_), Chesapeake Energy (CHK_), Continental Resources (CLR_) and EOG Resources (EOG_).

But despite playing a major role in the shale boom, natural gas-focused Devon and Chesapeake and oil-focused Continental and EOG aren't profiting equally. Right now Continental and EOG are the winners.

Winners and Losers From Obama's Anti-Coal Efforts to Cut Carbon Emissions

This article was originally published by TheStreet on June 26, 2014

By Sarfaraz A. Khan. Research Asst. Daniel L.

NEW YORK (TheStreet) -- The Environmental Protection Agency is coming down hard on the coal-based power plants, and this creates some exciting new investment opportunities.

Earlier this month, the EPA released its highly anticipated proposal that aims to cut carbon emissions by 25% by 2020 and 30% by 2030 from 2005 levels. So far, since 2005, the U.S. emissions have already fallen by 15%. The additional decline will be achieved by placing carbon emission limits on coal-based power plants.

As a result, the coal related stocks, including miners and energy producers such as Peabody Energy (BTU_), Alliance Resource Partners (ARLP_), Yanzhou Coal Mining (YZC_),Walter Energy (WLT_) and Arch Coal (ACI_), could be in for a challenging future. This can further aggravate the performance of Market Vectors Coal ETF (KOL). The coal sector fund is down 4% for the year to date, currently at $18.60.

On the other hand, America's Natural Gas Alliance, or ANGA, has painted a rosy outlook for the natural gas industry as the government tries to reduce carbon emissions.

Exxon Mobil Might Struggle, But Not For Long

This article was originally published by GuruFocus on March 31, 2014

By Sarfaraz A. Khan

Earlier in January, analysts at Bank of America Merrill Lynch downgraded Exxon Mobil (XOM) to neutral from buy which caused a dip in the oil giant’s shares. Just two days ago, Bank of America made another change by upgrading Exxon Mobil to buy with a price target of $110. As a result, Exxon Mobil’s shares have risen by more than 3% since Thursday and closed at $97.70 on March 28.

Exxon Mobil’s investors would welcome the recent rally as it comes after the company revealed that it would reduce its capital expenditure by 6% and was expecting flat production for the current year to $39.8 billion. ... read full article at GuruFocus

Seventy Seven Spinoff Could Have Chesapeake's Investors Gushing

This article was originally published by TheStreet on March 26, 2014

By Sarfaraz A. Khan, Research assistant: Gohar Yousuf

NEW YORK (TheStreet) - Chesapeake Energy  (CHK_) plans to spin off its oilfield services business, and this could be a boon for investors.

Spinning off this business allows Chesapeake to unload around $1 billion in debt and raise cash. Moreover, since Chesapeake won't retain any interest in the unit after the spinoff, it will not be responsible for its capital expenditure.

The unit will be converted into a new company called Seventy Seven Energy, which is currently valued at between $2.5 billion and $7 billion. It will be listed at the New York Stock Exchange under "SSE."

Chesapeake Energy: More Oil, Fewer Assets And Short Term Outlook

From Seeking Alpha

According to a recent report by Reuters, the second biggest natural gas producer in the United States, Chesapeake Energy (CHK), has started cutting down the royalty payment it makes to the land owners on the back of depressed natural gas prices. The energy giant is now transferring a greater share of its marketing costs to Pennsylvania's landowners. The current move is in line with the company's broader cost cutting efforts. Talisman Energy (TLM) is also mulling royalty deductions while Royal Dutch Shell (RDS.A) (RDS.B) has been reducing the royalty payments to most of its Pennsylvania wells for quite some time.

Chesapeake has been eyeing a turnaround under the leadership of its new CEO Doug Lawler through a management overhaul, asset sale, debt reduction and cost cutting measures.

Management Changes

The new chief has fired at least four high profile employees, including Steven Dixon (the same Steven Dixon who was on the search committee which got Doug Lawler), and has brought in Anadarko Petroleum's (APC) Chris Doyle and Jason Pigott. Lawler is himself a 25-year Anadarko veteran.

More Oil

Chesapeake posted better than expected results in its previous quarter in which its adjusted EBITDA increased by 77% from last year to $1.42 billion on the back of a 7% increase in production. The natural gas giant was able to top the Street's estimates due to a 44% year-over-year increase in oil production to 116,000 barrels per day. Nearly all of this increase (93.4% to be precise) was due to … Read More

Chesapeake's Asset Sale: A Look Inside FTS International

From Seeking Alpha

The U.S natural gas giant Chesapeake Energy (CHK) has been offloading its assets to pump up its balance sheet. The company has been struggling due to the weak natural gas pricing environment, a mounting pile of debt -- which stood at $12 billion by the end of last year -- and some serious management problems, coming largely from the former CEO Aubrey McClendon. The business's current goals are to sell assets, cut spending, reduce debt and focus on increasing production of higher margin liquids. However, the WSJ has recently reported that Chesapeake has no plans to sell its much hyped $2 billion stake in FTS International due to a fall in its value, according to one estimate, to less than $1 billion.

McClendon took a brilliant decision to invest in FTS back in 2006 for just $100 million. The company now owns 30% of FTS. However, McClendon failed to cash in on his investment when it was worth significantly more. In late 2011 .... read more