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EV Energy Partners LP Message Board

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  • lizahuang54321 lizahuang54321 Jul 29, 2011 7:40 PM Flag

    consider the source

    I think you missed the point:
    "we must also consider the source. CHK talked about monetizing its Utica position in the near future, which provides it an incentive to exaggerate estimated value."

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    • on the other hand...

      You should of course always take information that comes directly from a company with a grain of salt. And normally something this significant would have me really skeptical. But here is the thing with Chesapeake: I’ve been following it for a long time and every time it tells me that a property is worth a certain dollar amount, it subsequently proves it by monetizing a portion of it.
      But the market is for some reason slow to grasp what these repeated monetizations show the various properties are worth. Chesapeake has done it five times already, monetizing portions of the following properties:

      * Haynesville 20% to Plains Exploration (PXP) for $3.1 billion
      * Marcellus 32.5% to Statoil (STO) for $3.4 billion
      * Barnett 25% to Total (TOT) for $2.25 billion
      * Eagle Ford 33% to CNOOC (CEO) for $2.2 billion
      * Niobrara 33% to CNOOC for $1.3 billion

      Every one of these properties was monetized for what Chesapeake had suggested it was worth. That is five for five, so how can you not believe that the new property is likely worth the $20 billion it suggests?

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