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Chesapeake Energy Singing the Same Tune Amid Skepticism

Mon, 14 May 2012 12:25:42 EDT

NEW YORK (TheStreet) -- Although Chesapeake Energy's language has changed in terms of the assets it will sell to close a large funding gap, the company is not changing its tune: When it comes to executing on asset sales, forget about a hiccup or two and bet on Chesapeake Energy CEO Aubrey McClendon to prove that all of his detractors are worrywart Chicken Littles.

Skepticism has mounted on how Chesapeake Energy can engineer asset sales to escape a liquidity crisis. The skepticism hit a crescendo late last Friday afternoon when Chesapeake disclosed in a 10-Q filing the fact that asset sales could be delayed due to the risk of breaching debt covenants. Sales of producing natural gas and oil properties could adversely affect the amount of cash flow the company generates and the use of those producing assets as collateral in debt agreements.

After shares tumbled to a 52-week low on Friday afternoon, and after an 8 p.m. press release on a Friday night from Chesapeake announcing $3 billion in emergency Wall Street credit funding, McClendon said in a Monday morning conference call that the company won't be challenged to raise billions in needed capital. ...

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Icahn to Disclose Chesapeake Stake: Report

Sun, 13 May 2012 21:46:14 EDT

NEW YORK (TheStreet) -- Chesapeake Energy expects Carl Icahn to disclose he has taken a significant stake in the company, according to a published media report.

The report, published on The Wall Street Journal's Web site, cited anonymous sources familiar with the matter.

A representative for Icahn declined to comment Sunday, the report said. ...

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Chesapeake Energy Gets $3 Billion Loan

Sat, 12 May 2012 15:41:43 EDT

By Michelle Chapman

NEW YORK -- Chesapeake Energy Corp. has received a $3 billion loan from Goldman Sachs and Jefferies Group, giving the company more time to sell assets and lower its debt.

Chesapeake has been aggressively selling oil and gas assets, but its stock tumbled Friday after the company suggested that some of its planned sales could be delayed. Investors, who worried about a cash crunch if any sales were delayed or halted, sent Chesapeake's stock down 13.8% to close at $14.81 on Friday. ...

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Chesapeake Energy Asset Sales Could Breach Bank Debt Rules

Fri, 11 May 2012 16:29:30 EDT

(Chesapeake Energy story updated to reflect Chesapeake statement on Eagle Ford VPP asset monetization plan being unaltered, Argus Research and Sterne Agee analyst comments)

NEW YORK (TheStreet) -- The latest cause for Chesapeake Energy's share spiral can be summed up this way: the company is damned if they do (sell the assets it needs to sell) and damned if they don't.

It's a Catch-22 involving the way that exploration and production company debt covenants with banks are written at a time when the company needs to sell assets to close a big funding gap. ...

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Insiders Think Basic Energy is Priced to Buy

Tue, 08 May 2012 09:06:38 EDT

NEW YORK (TheStreet) -- Let's face it; these are not the best of times for companies that produce natural gas as well as oil. When natural gas prices dropped below $2 per thousand cubic feet (MCF), investors almost panicked.

We've heard stories that the industry is producing more natural gas then there are facilities in which to store it. Some claim that the disparity between demand and production is on the level of 3 billion cubic feet per day. Can demand suddenly take up that kind of slack?

Then there are the issues about the nation's second-largest producer of natural gas, Chesapeake Energy. They've been making mostly negative headline financial news almost daily, and this has done further damage to the natural gas story. It's Often Darkest Right before the Dawn ...

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Chesapeake Energy Should Consider Sale: Top Shareholder

Mon, 07 May 2012 17:28:05 EDT

NEW YORK (TheStreet) -- Chesapeake Energy should consider offers to sell itself.

That's what the struggling oil and gas company's largest shareholder Southeastern Asset Management advocated to embattled CEO Aubrey McClendon in a Monday letter, as the company struggles with an over 40% 2012 stock drop in the past year.

In a filing with regulators earlier in May, Southeastern changed its status as an investor to "activist," signaling that the investor will look to play a more vocal role in Chesapeake Energy's strategy as it tries to overcome rock-bottom gas prices, a massively indebted balance sheet, and a string of revelations about potential conflicts arising from CEO McClendon's personal investments. Chesapeake shareholders meet their 2012 savior: Mason Hawkins, CEO of Southeastern Asset Management ...

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Exxon Is Good but Halliburton Is Better Value

Thu, 03 May 2012 09:48:15 EDT

NEW YORK (TheStreet) -- When it comes to oil and gas, there aren't many rivals that can go toe-to-toe with Exxon Mobil. I will concede that as enamored as I have become with Halliburton, even it can't compete with the successful track record of Exxon Mobil, the world's second largest company behind only Apple. Yet through no fault of its own, the company often gets overlooked when discussing some of the top run operations on Wall Street and seemingly punished for what appears to be routine success -- something from which the company has become somewhat of a victim.

It goes without saying, that this is a tremendous problem to have. But while Exxon trades in-line with Halliburton from the standpoint of their respective multiples, the stock remains significantly discounted when compared to such names as Schlumberger. The concerns surrounding natural gas cannot be overstated, as with several of its peers and most notably Chesapeake Energy, Exxon has had to deal with adverse effects of not only slower production, but considerably weaker North American prices for natural gas -- an event that served to offset what was once perceived to be a benefit of higher oil process....

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Chesapeake Energy Shareholders: Meet Your Would-Be Savior

Wed, 02 May 2012 17:04:15 EDT

NEW YORK (TheStreet) -- Chesapeake Energy's largest shareholder is turning into an activist. The move by Southeastern Asset Management, Chesapeake's top shareholder, signals that even after the company said it would split the chairman and CEO roles and agreed on early termination of a controversial oil & gas well ownership program for its co-founder and CEO Aubrey McClendon, investors may push for bigger changes to overcome a balance sheet in crisis and a 2012 low in shareh prices.

On Wednesday, Southeastern, with an over-13% stake in Chesapeake, changed its status to an activist investor so that it can work with the struggling gas giant's management to boost shares. In a filing with the Securities and Exchange Commission, Memphis, TN-based Southeastern said that it would work with management and outside parties on "possible courses of action to assist in building corporate intrinsic value per share or to cause the company's true economic value to be recognized." Chesapeake's biggest investor becomes an activist

The move comes amid new revelations about McClendon's potential conflicts of interest related to his stewardship of the second biggest U.S. oil and gas driller after ExxonMobil . A Reuters investigation on Wednesday reported that McClendon had run a $200 million commodities trading hedge fund that may conflict with his role at a leading oil and gas exploration and production company. Last week Reuters published an investigation of McClendon's personal loans using his stake in Chesapeake wells as collateral. ...

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Fund That Cashed in on Nook Bets on Marathon Petroleum

Mon, 30 Apr 2012 10:57:12 EDT

NEW YORK (TheStreet) -- Jana Partners, a hedge fund with an activist investing bent, is betting on Marathon Petroleum to be a big payday in 2012.

Jana has been on the right end of several big investments, including the Monday announcement that Barnes & Noble is spinning off its Nook business in a major deal with Microsoft. Jana's bet on Marathon Petroleum specifically is interesting in light of another major Monday deal in the energy space, with the sale of Sunoco to Energy Transfer Partners for $5.3 billion.

David DiDomenico, a partner at Jana, said that the fund has targeted Marathon Petroleum because of the value in the company's logistics and midstream operations, which are hidden in its larger refining business. Before the ETP acquisition, Sunoco was in the process of exiting the refinery business to to focus on energy logistics and infrastructure. ...

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Sunoco Being Bought for $5.3 Billion

Mon, 30 Apr 2012 07:47:14 EDT

NEW YORK (TheStreet) -- Energy Transfer Partners reached a deal to buy refiner Sunoco for $5.3 billion.

"This transaction, which will be immediately accretive, represents the next step in Energy Transfer Partners' transformation into a more diversified enterprise with an integrated and expanded footprint," said Chairman and CEO Kelcy Warren, in a statement Monday. "As we have said in the past year, our goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs, and refined products. With this transaction, we make a major move in that direction."

Sunoco shares are being valued at $50.13 under the cash-and-stock deal. Sunoco closed Friday at $40.92. ...

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ConocoPhillips Shows Bigger Isn't Better, as Big Oil, Exxon Lag

Thu, 26 Apr 2012 13:26:30 EDT

NEW YORK (TheStreet) -- The best Big Oil stock may be the one planning to become smaller.

Investors looking to find stock profits in the gargantuan but slow-growing earnings of Big Oil companies have been disappointed in 2012, but as May approaches, there's reason to focus on the upcoming split of ConocoPhillips over the earnings results of ExxonMobil, which again disappointed investors.

As industry giants like ExxonMobil, Chevron , BP and Royal Dutch Shell lag rising markets, an ambitious breakup strategy by ConocoPhillip may be a strong target for those in search of a needle-moving investment within a Big Oil group of stocks that don't seem to budge. ...

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Shell Beats Forecasts on Higher Oil Prices

Thu, 26 Apr 2012 05:24:57 EDT

AMSTERDAM -- Royal Dutch Shell delivered forecast-busting first-quarter earnings on Thursday as it benefited from an increase in production and the higher price of oil.

The oil company's earnings on the industry standard CCS or "current cost of supplies" measure, which strips out changes in the price of oil, and excluding one-time charges, were $7.30 billion, up 16% from $6.29 billion.

Earnings were higher than anticipated -- the consensus in the markets was that the company would post something around the $6.5 billion mark. ...

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Halcón Resources Buys Shale Driller GeoResources for $1B

Wed, 25 Apr 2012 08:28:11 EDT

NEW YORK (TheStreet) - Halcón Resources is buying GeoResources at a value of roughly $1 billion in a cash and stock offer that will more than double its oil and gas reserves.

The deal also pushes Halcón Resources, a company that acquires and then develops oil and natural gas assets, further into shale and unconventional energy exploration such as the Williston Basin of Montana, North and South Dakota.

In the deal, Halcón Resources will pay $20 in cash and a stock conversion of 1.932 of its shares for each share of GeoResources, valuing the company at $37.97 a share or a 23% premium to Monday's closing price. ...

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Westport Innovations: This Is Where It Gets Interesting

Wed, 25 Apr 2012 06:59:35 EDT

(Westport Innovations story updated for latest Nasdaq short interest data)

NEW YORK (TheStreet) -- I want to say it's time to buy Westport Innovations, but that might be reckless advice given the seemingly limitless free fall in shares of the natural gas engine maker. What I will say is that it's at least time to put this stock back on your watch list, but don't expect more than to watch it fall even more than it has already.

I think it's all that can be said right now of Westport Innovations, as shares slipped below the $30 mark on Tuesday, for the first time since last December, a long ride down from above $50 mark the shares hit on March 21, and its 200-day moving average now a distant memory. ...

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What's Buffett Buddy Lou Simpson Doing on Chesapeake's Board?

Fri, 20 Apr 2012 13:53:56 EDT

NEW YORK (TheStreet) -- Phil Weiss, energy analyst at Argus Research, thought there was something not quite right with Chesapeake Energy CEO Aubrey McClendon when he spoke this week at an industry conference, the same day that Reuters reported on the $1.1 billion in personal loans that the outspoken and controversial CEO had taken out and linked to holdings in Chesapeake Energy wells.

"He is usually full of energy and talks about how great his company is, but when he was speaking on Wednesday, there were times that it seemed like he was mumbling. He did not sound like himself at all," Weiss said. "I've seen him live at conferences and at three analyst meetings and then on countless calls, and I've never heard him present like he did this week," Weiss said.

The "self" that Weiss refers to is the smooth-talking CEO, and that fits a red flag checklist put down on paper years ago by value investing giant Phil Fisher to help investors find companies best to avoid. In his book Common Stocks for Uncommon Profits, Fisher made the case that among the biggest red flags with stocks is a highly promotional management team. ...

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