Expand Energy (Formerly Chesapeake)

[ou48A]

Natural gas closed below $2 today

It’s good that CHK has been moving to more liquids production.
But is it enough to save CHK and others like SD more serious pain?

[mugofbeer]

Natural gas closed below $2 today

It’s good that CHK has been moving to more liquids production.
But is it enough to save CHK and others like SD more serious pain?

CHK is fine. They simply adjust, sell assets, reduce spending, slow growth until gas prices rise againor they become more of an "oil" company.

[Maynard]

Chesapeake Oilfield Services files for IPO of up to $862.5 mln 04/16 04:56 PM

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* Intends to list Class A common stock on NYSE under "COS"

* Names Goldman Sachs, BofA Merrill Lynch as underwriters

April 16 - Chesapeake Oilfield Services, a unit of Chesapeake Energy Corp (CHK:$19.19,00$-0.76,00-3.81%) , filed with U.S. regulators to raise up to $862.5 million in an initial public offering of its Class A common stock.

In a regulatory filing with the U.S. Securities and Exchange Commission, the company said Goldman Sachs and BofA Merrill Lynch would underwrite the offering.

The filing did not reveal how many shares the company planned to sell or their expected price.

Chesapeake Oilfield Services provides its parent, Chesapeake Energy (CHK:$19.19,00$-0.76,00-3.81%) , and other partners services in the Eagle Ford, Utica, Niobrara and Marcellus shale plays, some of the most heavily drilled areas in the United States.

Last month, Chesapeake Chief Executive Aubrey McClendon said the company would likely announce a way to monetize its oil services business and its 30 percent stake in privately held oilfield service company Frac Tech International in the fourth quarter.

Chesapeake Oilfield Services, which intends to list its Class A common stock on the New York Stock Exchange under the symbol "COS", said its parent Chesapeake will own all of the company's Class B shares.

Chesapeake formed the oilfield services subsidiary last September and said it believes the business will be worth as much as $10 billion in 2012.

[Maynard]

Chesapeake shares fall in premarket trade to fresh 52-week low 04/18 07:55 AM

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NEW YORK, April 18 - Shares in Chesapeake Energy Corp (CHK:$19.12,00$-0.07,00-0.36%) fell Wednesday on news that its chief executive officer Aubrey McClendon had borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells.

The stock dropped 2.5 percent to $18.65 per share in premarket trade, although volume was light at 115,000 shares. The stock has lost 14 percent so far this year.

Companies involved in natural gas production have seen their shares hit recently as excess supply and warm weather undercut prices of the commodity.

Both McClendon and Chesapeake said the loans did not pose any conflict of interest. They are private transactions that the company has no responsibility to disclose or to vet, Chesapeake said.

"There are no covenants or obligations in my loan documents or mortgages that bind Chesapeake in any way," McClendon wrote in an email to Reuters.

But traders appeared to be erring on the side of caution.

"I think where there is smoke, there may be fire - and investors are still in a shoot first mentality - we will see real action when the market opens and we get some liquidity," said David Lutz, a trader a Stifel Nicolaus in Baltimore.

The loans, which have not been previously detailed to shareholders, were used to fund McClendon's operating costs for an unusual corporate perk that offers him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn used the 2.5 percent stakes as collateral on those same loans, documents filed in five states showed.

Analysts, academics and attorneys who reviewed the loan documents said the arrangement raised the potential for conflicts of interest.

[onthestrip]

Shocker, more news on the shady practices of Aubrey and chpk. I've made up my mind that it is best for chpk, it's employees, and the city of okc that Aubrey step down and someone else take over as CEO. The guy is wreckless and is basically using the company as a personal bank account.

[BoulderSooner]

Shocker, more news on the shady practices of Aubrey and chpk. I've made up my mind that it is best for chpk, it's employees, and the city of okc that Aubrey step down and someone else take over as CEO. The guy is wreckless and is basically using the company as a personal bank account.

nothing in your post is close to the truth

[dankrutka]

nothing in your post is close to the truth

So then tell us the truth...

[OklahomaNick]

Shocker, more news on the shady practices of Aubrey and chpk. I've made up my mind that it is best for chpk, it's employees, and the city of okc that Aubrey step down and someone else take over as CEO. The guy is wreckless and is basically using the company as a personal bank account.

This must be the same guy that said that Russell Westbrook shoots too much.. and that Paul Thompson should have replaced Jason White in the 2003 National Championship, and that he was upset when Landry Jones decided to come back for his senior season..

Why would a guy that has been the BEST for the city, company, and overall community for the last 20 years all the sudden be better if he was gone? Absolutely asinine..

[OklahomaNick]

I agree that he has been VERY aggressive, and aggressive people are occasionally viewed as wreck-less.
But staying he should step down from a company he created is silly

[Boomer3791]

Here's the article about McClendon's $1.1B in personal loans. This looks very, very bad. http://www.reuters.com/article/2012/...83H0GA20120418

[OKCTalker]

Its "reckless."

[OKCTalker]

And CHK is down 10.04% so far today. The market seems to have concerns about Aubrey.

[OklahomaNick]

Yes, that article looks bad.. but it is definitely scathing

[Boomer3791]

And CHK stock has now dropped 10%.

[jn1780]

This must be the same guy that said that Russell Westbrook shoots too much.. and that Paul Thompson should have replaced Jason White in the 2003 National Championship, and that he was upset when Landry Jones decided to come back for his senior season..

Why would a guy that has been the BEST for the city, company, and overall community for the last 20 years all the sudden be better if he was gone? Absolutely asinine..

Comparing Aubrey to Westbrook, Thompson, and White? Excuss me while I vomit.
Hey lets compare Ken Lay to these sports stars. He was great for Houston and the country. I can only hope Cheaspeake isn't secretly doing something as bad as Enron.

[Pete]

CHK & McClendon's risky, complex and tangled financial dealings are scary to lots of people, including a bunch of analysts who look at this much more closely than anybody in the general public.

Even without delving into the fine print we know their stock is in the toilet and that McClendon recently lost almost his entire fortune (billions!) in one day. There is also a pretty steady stream of scathing articles from reputable financial sites.

Ask yourself where you have heard comments like these before:

McClendon's investor presentations are standing-room-only. But he often bristles when his business model is questioned by analysts, frequently arguing that Wall Street does not understand the company.

As I've said before, I sure hope this all works out for them but you also can't blame anyone who loves OKC for being a bit worried.

[MikeOKC]

CHK & McClendon's risky, complex and tangled financial dealings are scary to lots of people, including a bunch of analysts who look at this much more closely than anybody in the general public.

Even without delving into the fine print we know their stock is in the toilet and that McClendon recently lost almost his entire fortune (billions!) in one day. There is also a pretty steady stream of scathing articles from reputable financial sites.

Ask yourself where you have heard comments like these before:




As I've said before, I sure hope this all works out for them but you also can't blame anyone who loves OKC for being a bit worried.

Thank you, Pete. You said it well. Anybody who loves this city should be concerned by the current management team at CHK.

[MikeOKC]

One other point, this latest report is a picture perfect example as to how Aubrey still runs CHK as if it's a private company. Look at what he did with the loans, the collateral used; if nothing else this shows again how he just can't seem to understand he's the CEO of a public company and has to be held accountable as such.

[adaniel]

CHK is a sound company, I certainly wouldn't call them an Enron. But it is obvious that they are in way over their head. I wouldn't bet against them in the long run, but they are a company that's about 5 year ahead of its time and used a lot of debt to get there as well.

I hat to play the telephone game, but I know two people who are very familiar with CHK inner workings. The company's highly touted "asset divestiture" they are doing to raise $10 billion at this point is a matter of survival, according to these two folks. Should they net all of that, then they will probably be okay since CHK has finally started getting a pretty good liquids position. But if not, then things get hairy. All options, including the "b-word" will be on the table at that point.

At least one of these people also indicated AM is dangerously close to being outed. I have a hard time believing that, but its likely a bigger possibility now than its ever been.

[Pete]

Until their board composition changes, McClendon is under no immediate threat. If and when changes are made there, then that will be the first sign he is vulnerable.

Thus far, they have been successful selling assets to fund their operations. But clearly that is not a sustainable way to run a business.

[MikeOKC]

Reuters full investigative report with graphics, charts and a lot more information than in the article linked above.
http://graphics.thomsonreuters.com/1...eMcClendon.pdf

[MikeOKC]

Forbes tells it like it is in an article on CHK's response. Aubrey is finding his typical double-speak is finding dead ears on this one.
http://www.forbes.com/sites/francine...himself-first/

[adaniel]

Until their board composition changes, McClendon is under no immediate threat. If and when changes are made there, then that will be the first sign he is vulnerable.

Thus far, they have been successful selling assets to fund their operations. But clearly that is not a sustainable way to run a business.

You would think that some on the board were getting tired of defending him from shareholder uprisings. I agree with your notion, however, and his board is full of what appears to be yes-men. So its going to take something pretty dramatic for someone to finally pull the trigger.

[Pete]

Part of the recent shareholder uprising was to rid the board of McClendon cronies, but they didn't have any success.

I imagine they'll keep trying and as I said, when those actions start to get traction, that's the first sign there may be bigger changes in store.

But as it stands, it's still Aubrey's company.

[MikeOKC]

Fox Business made a really good point. The really bad news for CHK is that the share price has dropped to $17.68 (as low as $17.17 after one large sell) and there's no great rush to buy at that highly discounted price. They say that's a reflection of the lack of faith in the CEO management team.

It's very sad that the only positive thing I have been able to find is a back-handed one from Seeking Alpha, where they basically say investors are overreacting because we already know CHK is run for the benefit of the corporate insiders and not the investors - what's new? Pretty sad when that's the positive news out of this.