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

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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

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