Aubrey McClendon is on his way out as CEO of Chesapeake Energy.
But its cash and debt problems remain, writes Argus Research's Phil Weiss.
Weiss is arguably the top Chesapeake analyst, having nailed recent filings and getting named the second-best sell-side energy analyst on the Street by Reuters.
In a special note released this morning following McClendon's announcement, Weiss says he will not upgrade Chesapeake because its books remain totally lopsided:
We remain concerned about liquidity and leverage at HOLD-rated Chesapeake Energy Corp. (CHK), particularly after management's admission in November that its debt reduction goal would be pushed back. In addition, a number of asset sales that we had expected to be completed by now have still not been announced.
While he sees McClendon's retirement as a "positive development," Weiss says these problems will not disappear simply as a result of management and board restructuring. Potential buyers of the company's assets, he says, are almost certainly thinking the same thing:
...we prefer to see concrete evidence of change rather than rely on management's proclamations. We also think that the delayed asset sales may highlight an issue we have discussed in the past: the market is aware of CHK's liquidity issues, and potential buyers are likely driving hard bargains.
Shares are up 6 percent today.
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