0.1770 +0.01 (4.12%)
After hours: 7:59PM EDT
|Bid||0.1753 x 1000|
|Ask||0.1773 x 800|
|Day's Range||0.1660 - 0.2100|
|52 Week Range||0.1200 - 3.4300|
|Beta (5Y Monthly)||2.79|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Apr 12, 2015|
|1y Target Est||N/A|
Chesapeake Energy Corp said on Thursday shareholders will vote on April 13 on a reverse stock split proposal, which if approved, the company expects would boost its share price to a level required to stay listed on the New York Stock Exchange. The NYSE's listing norms mandate that a stock's average trading price over a 30-day period be above $1 per share. If a company fails to meet the requirement, the NYSE notifies it and gives a six-month grace period to pull up the stock price.
Chesapeake Energy Corp. said late Thursday it has set a special shareholder meeting to approve the details of its reverse stock split. The meeting will be held Monday, the natural-gas producer said. The company's reverse stock split proposal includes ratios between one for 50 shares and one for 200 shares. If shareholders approve the plan, the final ratio will be determined by the board, Chesapeake said. The reverse stock split is expected to be effective at the end of business on Tuesday, and shares will begin trading on a split-adjusted basis the following day. Chesapeake shares have fallen under the minimum $1 bid price to continue to trade on the NYSE and the reverse stock split is intended to increase the share price, among other goals. Shares of Chesapeake rose 1.2% in the extended session Thursday after ending the regular trading day down 0.6%.
All of a sudden, renewed optimism about the government stimulus package and a handful of data points suggesting the spread of COVID-19 may be slowing has the S&P 500 up 10.3% since April 1. Unfortunately, the economy and the market are not out of the woods just yet.It may be years before some businesses get back to normal, and some may never recover. Given most stocks have rallied significantly off their lows so far this month, it may be a good time to cash out of some of the dead weight in your portfolio while the prices are decent.Here are the eight Underperform-rated stocks with the most potential downside, according to Bank of America.Diamond Offshore Drilling Inc (NYSE: DO) Travel restrictions amid the COVID-19 shutdown have crippled global crude oil demand. At the worst possible time, Saudi Arabia and Russia have entered a pricing war that has pushed oil prices to fresh 20-year lows.Analyst Chase Mulvehill says oil prices will likely drop even further once global storage capacity is completely used up, essentially forcing production to stop. Diamond may struggle to sustain its cash flow, bringing its $2 billion in debt into focus.Bank of America has an Underperform rating and 25-cent price target for DO stock.See Also: 8 Best Investment Strategies During A RecessionYPF SA (NYSE: YPF) YPF is an Argentinian oil E&P, refining and distribution company.Analyst Frank McGann recently cut his price target for YPF and other Latin American oil and gas producers due to an increasingly bearish outlook for crude oil prices. McGann said YPF will likely cut capex and operating costs, but it will not be able to offset the negative impact on earnings and cash flow. He said YPF is exposed both to oil price weakness and regulatory risk given the stressed economic environment.Bank of America has an Underperform rating and $1 price target for YPF stock.Covia Holdings Corp (NYSE: CVIA) Covia is a leading provider of frac sand and resin coated proppants for the oil & gas industry.Mulvehill says there's a reasonable argument that U.S. oil and gas E&Ps shouldn't be completing wells at all in the current environment. Bank of America is forecasting a 70% drop in U.S. onshore well completion and a 40% decline in rig activity in the second quarter. Furthermore, Mulvehill says that decline will likely continue into at least the third quarter.Bank of America has an Underperform rating and 10-cent price target for CVIA stock.Southwestern Energy Company (NYSE: SWN) Southwestern Energy is one of the largest U.S. natural gas producers.Analyst Doug Leggate says the outlook for gas and natural gas liquids remains pressured, the core of the Super Rich Window of the Marcellus shale has limited remaining inventory and Southwestern is overleveraged in an environment of weak commodity prices. Leggate says Southwest could outspend its cash flow by $368 million in 2020. Given Southwestern shares have rallied 77.1% in the past month, now might be a good time to cash out on any gains.Bank of America has an Underperform rating and 55-cent price target for SWN stock.Tilray Inc (NASDAQ: TLRY) Tilray is one of the largest Canadian legal cannabis producers.Analyst Christopher Carey says Tilray's diversified portfolio of assets is appealing, but its financial performance has been inconsistent and its balance sheet is looking increasingly risky given its cash burn. Given the difficult financial situation, Carey says investors should be prepared for more dilution ahead.Tilray completed an equity raise on March 13, and released 11 million shares from lock-up on March 31. Carey says investors should expect at least another 37.5 million shares to be released in the next year.Bank of America has an Underperform rating and $2 price target for TLRY stock.Qurate Retail (NASDAQ: QRTEA) Qurate is the parent company of home shopping networks HSN, Cornerstone and QVC US.Analyst Heather Balsky says Qurate hasn't seen any positive or negative impact on demand following the COVID-19 outbreak, even in Japan and Italy. At this point, Balsky said the company's biggest coronavirus-related risk is a prolonged recession given the company's exposure to discretionary spending. Unfortunately, even prior to the outbreak, Balsky said Qurate was struggling with margin and sales headwinds. She said a boost in capital returns would be a good sign.Bank of America has an Underperform rating and $5.50 price target for QRTEA stock.See Also: 7 Media And Entertainment Stocks To Buy, Sell And Hold Range Resources Corp. (NYSE: RRC) Range Resources is a natural gas producer in Louisiana and Appalachia.Leggate says Range's commitment to cut its 2020 budget by $90 million to $430 million may not be enough given the unprecedented climate. At this point, Range still claims it can maintain flat production in 2020 and 2021, but investors may question how the company can somehow significantly cut spending but not production guidance. Leggate is bearish on the long-term outlook for natural gas and LNG pricing and says Range's leverage is much too high.Bank of America has an Underperform rating and $1.05 price target for RRC stock.Chesapeake Energy Corporation (NYSE: CHK) Chesapeake Energy is one of the largest natural gas-focused U.S. E&Ps. The stock has rallied 14% so far in April, but it's still down 95% in the past year and trading at just 17 cents. At that price, the stock may seem like a bargain at first glance, but Leggate says the best option for Chesapeake at this point given its extremely leveraged balance sheet may be bankruptcy restructuring.Incredibly, Chesapeake's market cap is down to just $331 million, while its net debt stands at about $9 billion, highlighting the potentially hopeless situation.Bank of America has an Underperform rating and six-cent price target for CHK stock.Latest Ratings for TLRY DateFirmActionFromTo Mar 2020Cantor FitzgeraldMaintainsNeutral Mar 2020Eight CapitalDowngradesBuyNeutral Mar 2020Cantor FitzgeraldMaintainsNeutral View More Analyst Ratings for TLRY View the Latest Analyst Ratings See more from Benzinga * Here's How Much Investing 0 In The 2018 Debut Of Aurora Cannabis Would Be Worth Today * 7 Cannabis Stocks To Buy, Sell And Hold(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Donald Trump tweeted on April 2 that Saudi Arabia and Russia were looking to cut daily oil production by 10 million barrels. He later suggested the cut could be as high as 15 million barrels. If this turns out to be accurate, the price of oil will climb dramatically, providing Chesapeake Energy (NYSE:CHK) with a potential lifeline. And boy, could CHK stock use one.Source: Casimiro PT / Shutterstock.com However, before you hop on this unbelievably speculative play, consider the source of the tweet. They don't call Trump the Pinocchio President for nothing. OPEC MeetingAs I write this, OPEC is scheduled to hold a video conference on April 6 that will include oil producers outside the 14-country alliance, most notably, Russia. It's also possible that the U.S., UK, and Canada could be invited to the meeting.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs a result of Trump's tweet and the subsequent OPEC announcement, the price of a barrel of Brent crude has jumped to almost $34 and West Texas Intermediate (WTI) crude is nearing $27 a barrel. * 7 Telecom Stocks That Are Worth a Close Look That's great news if you own CHK stock.In the first three months of 2020, oil prices fell by 65% due to the double whammy of increased oil production by Russia and Saudi Arabia and the demand slump caused by the global coronavirus pandemic and subsequent shutdowns.In my March 25 article about Chesapeake, I mentioned that the cost of a barrel of oil for U.S. producers was between $20.99 (conventional oil) and $23.35 (share oil). By comparison, Saudi Aramco's cost was less than $9.As a result, I argued that in a world full of cheap oil, Chesapeake was going to have significant difficulties selling assets to pay down debt, a necessity if it wants to remain in business.Should OPEC be able to agree on the size of a production cut, not only would Chesapeake be able to profit from the sale of its oil production, but its assets would become far more attractive to potential buyers.So it's not an understatement to say that OPEC's Monday meeting is the company's last and best hope of sticking around into 2021. You can be sure CEO Doug Lawler and the rest of his executive team will be doing their best to find out what was said and decided during the meeting. Should You Buy CHK Stock?I've been skeptical of Chesapeake's chances of survival for some time. In my most recent article, I suggested that unless a miracle happened, Chesapeake's advisers could be meeting with a bankruptcy judge in the not-too-distant future.It appears that the potential cut to oil production could be the miracle CHK shareholders were looking for. That said, by no means does a production cut secure its long-term survival. The company must reduce its level of debt as soon as possible, regardless of the price of oil.InvestorPlace contributor Louis Navellier and the InvestorPlace Research Staff recently highlighted some of the reasons why Chesapeake's stock is ready to be buried. Not surprisingly, they also mentioned debt's a major concern."The only factor that might weigh in Chesapeake's favor is the ultra-low cost of carrying debt nowadays. The Federal Reserve has suppressed borrowing costs to their lowest levels in recent memory. But that, of course, doesn't wipe out Chesapeake's massive debt load. At best, it might delay the company's collapse for a little while," Navellier and company stated April 1.Would I recommend buying CHK stock? Not unless you have a deathwish.That said, positive news from OPEC's meeting should provide Chesapeake with a lifeline. For anyone who's lost big money on its stock, I hope the company doesn't squander this opportunity. Will Ashworth has written about investments full-time since 2008. Publications where he's appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * This Stock Picker's Latest Video Just Went Viral * The 1 Stock All Retirees Must Own The post Possible Production Cut Could Save Chesapeake Energy appeared first on InvestorPlace.
Oil stocks, natural gas producers and other commodity-based firms stand apart from one another based on factors such as where they're located and how efficient their operations are. But much of their success boils down to this simple idea: The higher the price of the commodity, the bigger the profits.Unfortunately, the inverse is also true, which is why many energy stocks are getting pummeled right now.Oil prices were already struggling with the fallout from the U.S.-China trade war and its effect on the global economy. But the coronavirus' economic ripple effect across the world - combined with Saudi Arabia's volley against other oil producers - has sent West Texas Intermediate (U.S. crude) oil prices to around $20 per barrel. Those are lows not seen since February 2002.The specific issue: Oil prices (and natural gas, for that matter) are well below the cost of production for even some of the leanest companies out there. Thus, many energy producers are losing money simply by virtue of operating their businesses. Mounting losses, rising debts, cut dividends and even bankruptcies are all on the table.Here are seven oil stocks and natural gas producers that are in considerable danger at the moment. While it's understandable that investors might want to seek out values in the beat-up energy sector, these are seven stocks to avoid. SEE ALSO: 15 Dividend Cuts and Suspensions Chalked Up to the Coronavirus
Chaparral Energy Inc is working with debt restructuring advisers as it looks to shore up its cash position at a time of financial distress for U.S. oil and gas producers, people familiar with the matter said on Friday. The economic fallout of the coronavirus pandemic and an oil price war between Russia and Saudi Arabia have led to the price of crude oil dropping by half since the beginning of March. This is putting pressure on debt-laden energy companies such as Chaparral, which is focused on producing oil and gas in shale plays in Oklahoma.
The sudden collapse in the price of oil will hurt natural gas exploration firms the most. Chesapeake Energy (NYSE:CHK) stock is especially vulnerable. The firm has an unsustainable debt load and cannot service the interest payments with energy prices falling.Source: Novikov Aleksey / Shutterstock.com CHK stock tried to hold the 50 cent support line on the charts. But energy prices are far too low to give the firm much hope of survival.Falling oil prices and the economic slowdown due to the coronavirus from China put Chesapeake Energy shareholders in jeopardy. When this started happening on March 11, the company's stock and bond values lost much of their value.InvestorPlace - Stock Market News, Stock Advice & Trading TipsChesapeake will have to restructure its debt and reverse-split CHK stock to avoid filing for bankruptcy. Bondholders will likely have to agree to a re-pricing of its debt. This group of investors is better off getting something instead of nothing.On March 16, the company reportedly hired restructuring advisors to deal with its dire situation. With nearly $9 billion in debt, the company may consider exchanging its upcoming debt.Chesapeake cannot buy back any of its long-term debt. This implies that long-term debt is worthless. It also suggests that CHK stock will not have any value. Can Cost Reductions Help CHK Stock?A reverse split may delay a delisting in the short term. But the sector's fundamentals have weakened considerably in the last few weeks. Chesapeake managed to achieve its goal of cutting $250 million in costs last year. Plus, it refinanced its near-term maturities and reduced its debt slightly. * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem For 2020, it forecast a capital expenditure reduction of around 30%. On its conference call, the company said that "We are targeting flat oil volumes, declining gas production, and free cash flow to neutral business in 2020. "Management could not have predicted oil prices falling this much. But with a $3 billion credit facility backed by its proved reserve base, banks may give the company some leniency.Given that the Federal Reserve cut interest rates to zero, Chesapeake may negotiate sharply lower interest rates with banks on some of its debt. Still, its backers will need to bet that energy prices will recover. More importantly, this speculation requires Chesapeake Energy to generate enough cash flow to service its interest payment obligations. Chesapeake Has Lots of AssetsThe company has a very large portfolio with a very significant land position. These assets are not getting developed without receipt of any capital funding. So, if a larger firm is willing to buy them, Chesapeake Energy may use the proceeds to pay down more debt.Even before the oil price collapse, big banks had concerns in Chesapeake Energy's debt-EBITDA multiple. Although it has plenty of collateral to back its debt, the weak energy markets may push the company to file for bankruptcy instead.Besides, Chesapeake has attractive assets like Powder River, Eagle Ford and Brazos Valley. My Takeaway on CHK StockThe majority of analysts rating CHK stock have a "sell" rating and a 25 cent price target. With the unfortunate downturn in the energy market, over-leveraged companies like Chesapeake Energy are unlikely to survive.Investors have better oil and gas companies to choose from. Those able to operate at oil prices under $30 per barrel will weather the storm. Chesapeake Energy is not one of them.Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get original insight that helps improve investment returns. As of this writing, Chris did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem * 5 Bank Stocks to Buy Now Because This Isn't 2008 Again * 12 Stocks to Buy That Are Already Positive The post Chesapeake Energy Stock Is Unlikely to Survive the Downturn appeared first on InvestorPlace.
The oil price crash has seen multiple oil and gas producers have their bonds pushed into distressed territory, with the credit agencies downgrading them to junk ratings
The recent decline in natural gas prices came as analysts and traders factored in worries about the slowdown in demand from the rapidly spreading coronavirus.
What a difference a month has made for Diamondback Energy (NASDAQ:FANG) stock. The company had been among the best-performing and best-run shale drillers. But now it is in serious financial trouble: driven massive returns since its 2012 initial public offering, it has since touched an all-time low on Wednesday.Source: Shutterstock The problem for FANG stock, however, is that the selloff actually makes sense. That claim seems bizarre given that the stock has declined 78% in just a month. It's not bizarre in the context of the industry and the balance sheet, however.More simply, it's not bizarre because the world is different for Diamondback than it was just a month ago. This is an industry that has a history of "boom and bust" cycles. The bust has arrived, and it's too early to be forecasting another boom for the stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips FANG Stock Rallies After Q4 2019 ResultsIt's incredible to review Diamondback's fourth quarter 2019 results, released after the close on Feb. 18, with the benefit of hindsight. The quarter was well-received -- shares rallied more than 6% the following day -- and with good reason.Average production rose 5% quarter over quarter, and 50% year over year. Diamondback doubled its dividend to $1.50 annualized, offering (at the time) a 2% yield. * 10 Stocks to Invest In for a Post-Coronavirus Whipsaw In the release, Diamondback noted that it had raised $3 billion in debt with an investment-grade rating. And it spent another $200 million in the quarter to repurchase stock.In the "old" shale environment, that all was good news. But in the light of an "all out price war" instituted by Saudi Arabia earlier this month, the quarter looks very different. Looking to 2020The ramp in production, for instance, is going to reverse in a hurry. Diamondback has given a "minimum one-month break" for all of its completion crews. The rig count by the end of the year will drop by more than half. Production will steadily decline over the course of the year. Diamondback is trying now to save some of the capital spending it made just months ago.Diamondback has said it will protect its now-doubled dividend, but a cut may be on the way. The $200 million in share repurchases look disastrous: Diamondback paid an average of $82 per share for a stock now traded at $17.The investment-grade balance sheet still holds -- for now. But a cut to "junk" by ratings agencies at this point is just a formality. Diamondback's 5.375% senior notes, due 2025, are priced at 79 cents on the dollar. They yield over 10% to maturity.This simply is a different company. And it's not because Diamondback management was foolish, or dishonest, in February. It's not because investors weren't paying attention. It's because the Saudis moved, and crude oil, at the West Texas Intermediate spot price, went from $53 in February to $31 right now.At that price, much of Diamondback's acreage isn't economical, which is why production is being slashed. Its cash flow is going to plummet, which is why its share price has plunged.To be sure, there are reasonable debates as to whether FANG stock should be at $27 instead of $17 -- or $7 instead of $17. But from a broad standpoint, the decline in FANG stock is not a panic-driven selloff. The outlook is substantially worse than it was a month ago, and so the same should be true of the share price. Yes, Bankruptcy Is a RiskAnd the worst-case scenario is in play. Diamondback generated $3.1 billion in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2019. That figure is going to be slashed going forward. A 40% reduction in prices and much lower production both suggest most of those profits are going to disappear.Yet Diamondback has nearly $5.4 billion in debt. That in turn suggests that debt-to-EBITDA probably clears 6x (at least) looking to 2020 numbers.That's a dangerous multiple. It's actually about in line with where Chesapeake Energy (NYSE:CHK) sat last year as its own bankruptcy fears began to accelerate.To be clear, a single multiple doesn't mean Diamondback is going into bankruptcy. It almost certainly won't do so any time soon, given that most of its debt doesn't mature until 2025. The company has plenty of time to respond to the new environment, and to hope for higher prices to return.Still, as long as bonds are yielding 10%, it's important to remember that the worst-case scenario still exists. FANG stock has dropped by 80%, but if everything goes wrong it could fall another 100%. The Case for FANG StockAfter all that gloom and doom, it's important to point out that there is a bull case for FANG stock from here. The fact that crude has plunged doesn't negate the fact that the company has proven to be one of the better-run shale operators out there.In fact, Diamondback sailed nicely through the first shale bust in the middle of the last decade. The drop in WTI to $30 is a different animal, admittedly, but I'd rather bet on oil prices rebounding with FANG than with, say, Occidental Petroleum (NYSE:OXY), whose stock is reeling from last year's disastrous acquisition of Anadarko Petroleum.But Diamondback needs crude to rally for its stock to rally. As long as WTI stays below $35, I'm skeptical there's enough earnings power to support much more than the current $3 billion market capitalization. And there are other options out there. ConocoPhillips (NYSE:COP) and Apache (NYSE:APA) both are intriguing plays on a rebound.To be sure, an investor can create a smart thesis for choosing FANG stock as the best play on a rebound in crude. And going forward, there is hope. The balance sheet is in decent shape by sector standards. Management has been solid. Other drillers are going to cut back their own production -- and many will fail. Over time, that may allow for prices to recover.The point, however, is that investors have to build a thesis for Diamondback stock looking forward -- not simply buy because the stock is down so far. After all, many of those investors might have made a similar case at $30, when FANG already was more than 70% off 2019 highs. The stock has fallen since then. Don't forget that it could fall further still.After spending time at a retail brokerage, Vince Martin has covered the financial industry for close to a decade for InvestorPlace.com and other outlets. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 of the Best Long-Term Stocks to Buy in a Bear Market * 7 "Perfect 10" Healthcare Stocks to Buy Now * Where the FANG Stocks Sit in This Wild Market The post Diamondback Energy Stock Isn't Worth Chasing Here appeared first on InvestorPlace.
Natural gas explorer and producer Gulfport Energy Corp has hired an investment bank to help it tackle its roughly $2 billion debt pile following a collapse in energy prices, people familiar with the matter said on Wednesday. The move makes Gulfport the latest energy company to seek debt restructuring advice amid an oil price war between Saudi Arabia and Russia, and the coronavirus pandemic. Reuters reported on Monday that shale pioneer Chesapeake Energy Corp also tapped debt restructuring bankers and lawyers.
The oil price crash continued on Tuesday morning as Saudi Arabia announced plans to boost oil exports to record levels and Trump confirmed coronavirus dangers
Oil markets mostly lower Tuesday, overturning early strong gains, with market participants still spooked by the collapse in fuel demand resulting from the shutdown of vast areas of the global economy. AT 9:15 AM ET (1315 GMT), U.S. crude futures traded 0.2% lower at $28.95 a barrel, vacillating around the gain line for the day, while the international benchmark Brent contract fell 1.8% to $29.52. Late Monday, U.S. President Donald Trump warned of a likely recession and a lengthy disruption caused by the measures to combat the coronavirus outbreak.
Chesapeake Energy Corp. is in talks with debt restructuring advisers, Reuters reported Monday. Chesapeake has been in touch with lawyers and investment bankers who specialize in reworking debt, according to Reuters, which added that the company is still weighing its options and no debt restructuring move is imminent. Chesapeake was a pioneer in the fracking industry, but had a deep debt pile even before it was hit hard by the recent crude oil price war. Bill Zox, chief investment officer of fixed income for Diamond Hill Capital Management, told MarketWatch earlier this month that the outlook is grim for Chesapeake and many other U.S. shale-oil producers. "There is a certain subset of energy companies like Chesapeake that will not survive," he said in an interview. Chesapeake shares plummeted 33% on Monday, and are down 94% over the past 12 months.
The Oklahoma City-based company, which was co-founded by late wildcatter Aubrey McClendon, was struggling with its debt pile of roughly $9 billion even before an oil price war between Saudi Arabia and Russia and the fallout from the coronavirus pandemic contributed to driving its shares down more than 50% in the last three weeks. Chesapeake has enlisted restructuring lawyers at Kirkland & Ellis LLP and investment bankers at Rothschild & Co who specialize in reworking debt, the four sources said. The company is studying its options and no debt restructuring move is imminent, the sources added, asking not to be identified because the deliberations are confidential.
EOG Resources Inc, Whiting Petroleum Corp and EQT Corp cut drilling activity and budgets on Monday, becoming the latest North American shale producers to be hit by lower oil prices, which fell below $30. Oil producers are trying to shore up cash as demand dwindles because of the global coronavirus outbreak and the double-whammy of a price war that threatens shale companies, which had budgeted for oil prices at $55 per barrel to $65 per barrel in 2020.
Just when it looked like things couldn't get any worse for oil stocks, they did. In a big way.Already reeling in February from falling demand in the wake of the novel coronavirus outbreak going global, oil stocks collapsed even further in early March on news that Russia and OPEC began an all-out oil price war. Many oil stocks are now down more than 50% year-to-date. A handful are down 90% or more in 2020.The wipe out plunged many oil stocks into penny stock territory, with the implication being that bankruptcy is a real and likely option for many of these companies over the next few months.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat may not happen. There is a chance that COVID-19, which is spreading like wildfire today, actually starts to slow over the next few months as a coordinated effort from countries and businesses across the world to enforce social distancing helps stifle the disease.Perhaps more importantly, there is a chance that Russia and OPEC end their price war soon."Saudis and other Middle Eastern producers have their budgetary constraints [and] Russia is starved for cash," said Jonathan Barratt, chief investment officer of Probis Group. "So the dynamics of all those put together will mean they will come to an agreement somewhere."Oil demand trends could improve by summer 2020, while the supply glut could come down. If so, depressed oil stocks could rebound. * 7 U.S. Stocks to Buy on Coronavirus Weakness To be sure, buying penny oil stocks isn't for the faint of the heart. I'm not doing it. If you're a risk-seeking investor who thinks oil prices will bounce, however, perhaps consider buying these penny oil stocks: Chesapeake Energy (CHK)Source: IgorGolovniov / Shutterstock.com % Decline in 2020: 79.2%Perhaps the most (in)famous penny oil stock out there is Chesapeake Energy (NYSE:CHK).Chesapeake Energy is a U.S. shale oil producer that has been hit hard in 2020 on concerns that falling oil demand coupled with rising oil supply will cripple and eventually bankrupt this over-levered company. Year-to-date, CHK stock is down a whopping 79.2%.That may happen. Chesapeake does seem to be out of time, out of money, and out of options.But the bankruptcy thesis rests entirely on the idea that oil prices will remain depressed for the rest of 2020, leading to insufficient cash flows that aren't big enough to service the company's debt load. If oil prices rebound, Chesapeake's cash flows will rebound, too, and likely to levels that are big enough to pay debt costs. Gulfport Energy (GPOR)Source: Shutterstock % Decline in 2020: 85.3%Oil and gas exploration company Gulfport Energy (NYSE:GPOR) is a penny oil stock worth considering for traders betting on a rise in oil prices. Relative to peers, the company has better near-term growth prospects, healthier cash flows, and a more manageable debt load.Gulfport engages in both oil and natural gas exploration. But the natural gas component is the bigger one, accounting for about 75% of the company's revenue last year. Natural gas prices should actually head higher in the near term, as the oil supply glut forces some producers to cut back on natural gas exploration as their budgets tighten.That's a win for Gulfport. It's also a win that, unlike many other exploration companies, Gulfport was actually free cash flow positive last year, and that earnings before interest, taxes, depreciation, and amortization measured about $725 million. Those favorable financial features make the company's $2 billion debt load look manageable. * Buy the Dip in These 7 Online Advertising Stocks Now Of course, if oil prices stay low, Gulfport's cash flows and earnings will take a huge hit, and the company will likely spiral into bankruptcy. If oil prices rebound, the company will avoid bankruptcy, and GPOR stock will bounce back in a big way. Nabors Industries (NBR)Source: Shutterstock % Decline in 2020: 87%Alongside oil drillers, oil services stocks are also getting slammed. Case in point: Nabors Industries (NYSE:NBR), who provides rig and drilling technologies to the oil industry, has seen its stock drop 87% in 2020.The rationale is simple. As oil prices plunge, many debt-heavy oil exploration and production companies will have to cut back on spending in a big way. E&P spend reduction will directly lead to lower demand for the type of stuff that Nabors sells.So long as oil prices remain low, NBOR stock will remain depressed. If oil prices rebound, this stock will pop, too.That's because relative to peers, the company is fairly well capitalized with strong cash flows. Earnings before interest, taxes, depreciation, and amortization measured about $805 million last year. Free cash flow came in around $330 million. Both of those are above the company's annual debt expenses, which are around $200 million.Nabors is actually one of the financially more attractive companies in the penny oil stocks group. It's still too risky for me. But, if you believe that oil prices will rebound in the summer, then NBOR stock could be an attractive way to play that thesis.Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been recognized as one of the world's top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 7 Stocks to Sell as We Enter a Bear Market * 4 Energy Stocks Paying Jaw-Dropping Dividends * 3 Stocks to Buy That Will Dodge Any Volatile Market The post 3 Beaten-Up Penny Oil Stocks Only for the Bold appeared first on InvestorPlace.