Chesapeake Energy Corporation (CHK): What Has It Become?

Page 1 of 2

Chesapeake Energy CorporationAs May rolls in on Wednesday, battered Chesapeake Energy Corporation (NYSE:CHK) will tell us about its quarterly results. That’s fine, but what will be of far more interest to essentially all shareholders or potential shareholders, now that founder and longtime CEO Aubrey McClendon is (almost) gone, will be the big picture — call it a 30,000-foot perspective — on the company’s future direction.

You may be somewhat confused by my indication that McClendon is almost gone from the company. It seems that the terms of his non-competition clause in his employment agreement now provides him with free use of Chesapeake Energy Corporation (NYSE:CHK)’s aircraft through 2016. How in the world did the board let that one fly?

As you know, and without gratuitously invoking history, McClendon was essentially forced out of the company to which he essentially gave birth. The departure occurred on April 1 — an appropriate date, given the goings on during his last years at the company.

A fracking hall of fame?
To their credit, however, in nearly a quarter-century, McClendon and his founding partner, Tom Ward, now the CEO of SandRidge Energy Inc. (NYSE:SD), built an enviable entity in Chesapeake Energy Corporation (NYSE:CHK). Despite McClendon’s more recent travails, he and his company were at or near the creation of such major unconventional plays as the Barnett, Haynesville, Marcellus, Utica, and the exploding Eagle Ford, among others.

In fact, were something of a shale drilling and production hall of fame to be created, two names would be de rigueur for immediate inclusion: McClendon and George Mitchell. The latter, through his Houston-based — and now Devon-owned — company, Mitchell Energy, relentlessly propagated the notion that applying hydraulic fracturing to the massive layers of shale rock spread across the U.S. would yield a bounty of natural gas.

Analysts in a waiting mode
At this stage, and to the extent it’s even moderately meaningful, the analysts don’t expect Chesapeake Energy Corporation (NYSE:CHK)‘s quarter to be a bust. Indeed, their consensus is for the per-share number to come in at or near $0.25, up from $0.18 a year ago. Revenues are expected to reach about $2.8 billion, compared with slightly more than $2.4 billion for the comparable quarter of 2012.

Clearly, however, the vast majority of the Wall Street seers who spend their time checking on Chesapeake Energy Corporation (NYSE:CHK) and other independent producers, are agnostic regarding the company’s ability to execute a recovery from the double trouble created by McClendon’s shenanigans and a stretch of moribund natural gas prices. Of the 31 analysts with ratings on the company, 19, or a sizable 60%, currently are sporting hold ratings. Chesapeake Energy Corporation (NYSE:CHK) clearly has its intrepid believers, however, with 10 analysts calling it a buy or better.

But now, even with gas prices levitating, the key questions concerning the company involve:

news of assets sales, a chosen elixir for bringing relief to its groaning balance sheet

progress in naming a CEO replacement for McClendon

basic changes being conjured up by the interim leaders relative to strategic and operating approaches

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!