He lied all last year about how production would fall off a cliff this year. Last year he was long NG and publicly said CHK was a natgas company not an oil company. He said Oil was something that was hard to find. This was last year.
Low and behold now they want to be an oil company this year. Problem is they don't have the b/s to be an oil company.
Not only do they not have the balance sheet to become oil, but over 90% of the acreage is natural gas and the use and demand of natural gas is not going to change much during the next few years.
This is not me saying this but one of the board members of CHK.
Unfortunately the President and most of Congress does not care that we ship billions of dollars each week to foreign nations for energy purchases at ever higher prices. This is bankrupting the country and has been going on for 20 years.
Unfortunately there is not going to be any material change in natural gas use in this country. Most of the alternative energy car sales are going to be electric battery hybrids.
How many power plants get built in the U.S. each year? Not many. So natural gas use is not going to change that much. Coal is still the big boy in power plants.
What is sad is I own shares of CHK and the shares are going no where.
This is a bunch of BS about it B/S. 40% debt level is nothing when you look at the assets and the cash generation. For a $22 stock it will generate $16 in cash in 2011. Who else can put up such numbers -- while adding 1 trillion in reserves?
Argus says it is spending on acquiring oil propeties (last conference call) which will hurt it. No other company has 22,000 sq. miles of property, which is a finite asset. I suspect CHK has a major oil find near the Bakken where they are acquiring 500,000 acres. Recall the Haynesville where CHK acquired land for three years, getting 1.2 million acres, before it broke the news -- and it now has the guts of the 4th largest gas play ever.
Harry Reid tried again last week to pass the Pickens' Plan, but the Republicans shot it down again. I am sure he will try again, but who knows when. I met with my Republican Congressman and his aide, and he said, "This is a Democratic bill; I have nothing to do with it." Yep, create 4 million jobs, reduce oil imports by 40%, and put $240 billion into the economy -- yep, that's the Democrats for you.
Perhaps sooner than later, once Republicans can take credit for this it will move forward.
Based on what XOM paid for XTO it is worth $150. Too bad BP screwed things up or we would be out celebrating with our buyout $.
Eventually nat. gas will come back; in the meantime if your utility uses nat. gas for heating purposes then you should be taking advantage of the price reduction which will keep energy costs down during this winter. In fact, we were planning on insulating the house this past summer and didn't do it because I felt the cost of nat. gas was too cheap and the outlay of money at this time wasn't right for us. Our energy bills the past couple of months were the lowest they've been since we moved here over 11 years ago; (CA) partly due to the Enron rip off escapade but in large part due to the nat. gas prices being so low right now. If you believe in the adage buy low, sell high then having some nat. gas in your portfolio now in anticipation of higher prices and profits in the future just makes sense. Should you be frustrated about our country not using nat. gas as an alternative fuel in a larger capacity; definitely, but that's not unexpected since the large oil companies have too much power and control over congress and where the appropriations go, so they are actually threatening the security of our country to protect their own interest and greed. The one positive sign from big oil was Exxon's purchase of XTO last year; that should reinforce the narrative that nat. gas will become a bigger player in the future.