Chesapeake Business Practices

[okcpulse]

GM fails, we bail them out. A green car company fails in California, it isn't a blip on the radar. When an ENERGY company makes a mistake, it is skewered, dragged before congress and lectured like a five year old child when oil prices are high or a CEO'S private business affairs are made public. Sorry, I call BS.

There will be a shake up on the board, but at this point it is wait and see.

[okcpulse]

I honestly believe that Chesapeake has what it takes to move America to natural gas. It is very easy for a media outlet to angle a story to drive down the company's stock prices to make sure that doesn't happen. It is just as easy for the media to manipulate the market as it is for speculators.

However, it is now up to CHK to make things right with its shareholders, or else things will go south.

[MikeOKC]

GM fails, we bail them out. A green car company fails in California, it isn't a blip on the radar. When an ENERGY company makes a mistake, it is skewered, dragged before congress and lectured like a five year old child when oil prices are high or a CEO'S private business affairs are made public. Sorry, I call BS.

There will be a shake up on the board, but at this point it is wait and see.

Why will there be a shake-up of the board if you don't think AKM did anything wrong? What he did is egregious!

There's too many here not reading anything but CHK's response. So much denial. So much killing the messenger.

I honestly believe that Chesapeake has what it takes to move America to natural gas. It is very easy for a media outlet to angle a story to drive down the company's stock prices to make sure that doesn't happen. It is just as easy for the media to manipulate the market as it is for speculators.

However, it is now up to CHK to make things right with its shareholders, or else things will go south.

So, this is a media conspiracy? This is just too much.

[okcpulse]

Why will there be a shake-up of the board if you don't think AKM did anything wrong? What he did is egregious!

There's too many here not reading anything but CHK's response. So much denial. So much killing the messenger.



So, this is a media conspiracy? This is just too much.

There will be a shake up regardless of what think about McClendon.

However, some outlets are good sources. Wall Street Journal does their job, and I do agree with their assessment on CHK's debt, market cap and expenditures. Not denying they are over-extended and believing all is rosy. But why the massive media coverage on this and not other companies?

[PhiAlpha]

So after the millionth story written about how interesting this company is you aren't the least bit concerned?

Concerned because of the natural gas market situation, yes. Concerned about an article that doesn't have anything to do with the company itself, no.

AM is a risky CEO and the market is in bad shape for sure but he has been there before and it would be hard to believe they have not planned for poor market situations, especially after 2009. I work in the industry and have seen CHK acquiring large acreage positions in several emerging horizontal oil plays that we are chasing. The leases are much cheaper than those in the shale gas plays and CHK has the ability to drill them quicker and cheaper than many competitors due to owning their own large drilling fleet. In addition chk and most other companies have prepared for low gas price by hedging their gas. While their stock is taking a hit due to sub $2.00 mmbtu natural gas prices, they've locked it in and are marketing it at likely above $5 per mmbtu. Journalists can say what they want about chk but they will likely be fine in the long run.

And no mike, I don't work for CHK. Your self proclaimed industry watch dog title and obsessiveness just annoy me.

[PhiAlpha]

That's an over-the-top personal attack. I'm neither obsessive about this nor an idiot. I'm surprised that remark is still on the board considering Pete has been posting.

Wow did I hurt your feelings?

[Maynard]

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In addition chk and most other companies have prepared for low gas price by hedging their gas. While their stock is taking a hit due to sub $2.00 mmbtu natural gas prices, they've locked it in and are marketing it at likely above $5 per mmbtu. Journalists can say what they want about chk but they will likely be fine in the long run.

Unlike many others in the space, CHK is 'naked' for 2012 &2013 volumes -- no derivatives hedging; they get spot for oil & gas.

[MikeOKC]

Wow did I hurt your feelings?

No, frankly, it just shows you are probably young and certainly rude and immature. Most of us here can debate in a civilized manner without calling people obsessive idiots and lowering ourselves to lash out against fellow posters. A lot of people might annoy many of us, but we don't start calling members of the forum names. This isn't high school.

"Self-proclaimed industry watchdog?" That's BS. I consider myself a citizen watchdog of CHK - along with many others. Sorry it "annoys" you.

[PhiAlpha]

No, frankly, it just shows you are probably young and certainly rude and immature. Most of us here can debate in a civilized manner without calling people obsessive idiots and lowering ourselves to lash out against fellow posters. A lot of people might annoy many of us, but we don't start calling members of the forum names. This isn't high school.

You can think what you want.

"Self-proclaimed industry watchdog?" That's BS. I consider myself a citizen watchdog of CHK - along with many others. Sorry it "annoys" you.

Citizen watch dog of CHK, eh? Well go get 'em tiger!

[soonerguru]

There will be a shake up regardless of what think about McClendon.

However, some outlets are good sources. Wall Street Journal does their job, and I do agree with their assessment on CHK's debt, market cap and expenditures. Not denying they are over-extended and believing all is rosy. But why the massive media coverage on this and not other companies?

Maybe it has something to do with the on-site Botox treatments.

[dankrutka]

I appreciate MikeOKC's contributions. He's being personally attacked for posting stories from multiple major media outlets. This dialogue is important. If you don't want to partake in it civilly then don't post. geez.

[okcpulse]

PhiAlpha and I are in the same industry, so it is easy for us to see things from a different perspective. We see things that the media DOESN'T report. Again, this is why I get irked when CHK is compared to Enron. Thanks to Enron, we have Sarbanes-Oxley regulations to stick to. If those are violated, we are talking millions of dollars in federal fines.

[Doug Loudenback]

I don't like to self promote, but one Oklahoma publication, the Journal Record, has been covering all of these issues related to Chesapeake. We've covered McClendon's clashes with shareholders over the past two years and broke the story last November about McClendon repaying the company $12.1 million for his map collection as part of a legal settlement. You all should subscribe.
It should also be noted that the Oklahoman is also doing a much better job of covering these issues these days than they have in the past.

As well, perhaps the Journal Record might rethink whether it requires people to pay to read. Sure, its your right, so whatever you do will be OK, but please don't think that just because something is covered the Journal Record that very many people know about it.

At the least, as a public service, how about providing some dates combined with bullet points which describe the Journal Record's coverage right here ... is that too much to ask?

[David]

I appreciate MikeOKC's contributions. He's being personally attacked for posting stories from multiple major media outlets. This dialogue is important. If you don't want to partake in it civilly then don't post. geez.

I have to agree with KT on this. Mike, don't ever change.

[Doug Loudenback]

The only thing I can say for sure after reading through the last 4 pages in this thread is that the outcome is hugely important to Oklahoma City.

I've appreciated reading everything that Mike & OkcPulse and others have to say. But what I've not seen, but would like to, is for someone to intelligently and dispassionately put together a pro/con single piece so that numb-nut like me can gain a better grip on what's going/gone on. I'm pretty much a blank slate and would value someone objectively placing the facts and issues side-by-side, if anyone is up to doing that. Something like ...

1. McClendon did this (whatever "this" is). "This" fact is undisputed.
2. Some say that is wrong because .... some say it is not wrong because ...
3. McClendon did that (whatever "that" is). "That" fact is disputed.
4. Some say that is wrong because .... some say it is not wrong because ...

... in other words, not as a debate but as a discussion. That would be most helpful.

[OKCTalker]

But what I've not seen, but would like to, is for someone to intelligently and dispassionately put together a pro/con single piece so that numb-nut like me can gain a better grip on what's going/gone on. I'm pretty much a blank slate and would value someone objectively placing the facts and issues side-by-side, if anyone is up to doing that. Something like ...

1. McClendon did this (whatever "this" is). "This" fact is undisputed.
2. Some say that is wrong because .... some say it is not wrong because ...
3. McClendon did that (whatever "that" is). "That" fact is disputed.
4. Some say that is wrong because .... some say it is not wrong because ...

... in other words, not as a debate but as a discussion. That would be most helpful.

Doug - This would be terrific, but CHK hasn't been forthcoming with information. Or more accurately, they have been so voluminous in their disclosures that no one can sort it all out. In the absence of information that people can understand, they're naturally left to speculate and make broad allegations such as "Where there's smoke there's fire." Analysts and journalists are smart people who are paid to process and articuate complicated industry information for the rest of us - and they're baffled.

It is in CHK's DNA to withhold information, and in some cases - frankly - to lie. One case in point was when CHK Land initially sought to rezone and redevelop the Nichols Hills Plaza. The city asked for plans typically required in a PUD, but company reps - including their head of land & legal Henry Hood - denied that any plans had been prepared. Then Aubrey gave a newspaper interview stating that they had been working with national consultants on a development plan for years.

CHK can make things clear when they want to, but that's rare, and their stock price suffers for it. When that happened in 2008, Aubrey's holdings were all but wiped out by a margin call, and its clear that he didn't learn from that painful lesson.

[BoulderSooner]

So after the millionth story written about how interesting this company is you aren't the least bit concerned?

my concern is the same now as it was a month ago .. if nat gas prices stay below 2 for the next 5 years CHK is in real trouble ... if they go back to 4 they are in good shape ... if they go back to 7 .. CHK will be one of the most profitable company's in america

[Pete]

I don't see prices moving much unless there is a change to our export laws, and that doesn't seem likely.

[ereid]

And it begins. First to sue... http://www.reuters.com/article/2012/...83J0QJ20120420

[OKCTalker]

As well, perhaps the Journal Record might rethink whether it requires people to pay to read. Sure, its your right, so whatever you do will be OK, but please don't think that just because something is covered the Journal Record that very many people know about it.

Doug - Not to hijack this thread, but I believe that the JR's pay wall and terms had unintentionally made them all but invisible. I sent an email to Ted several months ago but never received a reply. I advertise a bit in the JR so I have an interest in increasing their readership.

[ou48A]

I don't see prices moving much unless there is a change to our export laws, and that doesn't seem likely.

Actually FERC just gave Cheniere Energy (LNG) regulatory approval to build the first Natural Gas export terminal.

This project will have the capacity to export 3% of the nation’s NG supply. It will probably take 2 to 3 year before it comes on line.

NG has been selling for 12 to 16 in China. XOM is building a large NG export terminal in Papua New Guinea. XOM is participating in another NG export facility in Australia. There are other NG export facilities that will be coming on line in the world. There are large supplys of shale gas expected to be developed in a few years in China and Poland and in other areas of Europe where they had been importing part of their NG via LNG.

In a few short years the world LNG market price is likely to be much lower.

Exports would help some but using more NG for electrical generation and transportation along with drastically lower dry NG drilling rates IMO offer the best opportunities to see sustained higher NG prices. A much better economy would also help.

[adaniel]

my concern is the same now as it was a month ago .. if nat gas prices stay below 2 for the next 5 years CHK is in real trouble ... if they go back to 4 they are in good shape ... if they go back to 7 .. CHK will be one of the most profitable company's in america

Expansions in Liquefied Natural Gas, particularly with developments like this probably means NG has bottomed out for the long term.

As much as I think CHK has really put itself in bad positions, its way too early to stick a fork in them. Should they get through what will probably be a very rough patch the next few months, then they will be okay. They have got to make a plan to pay down their debt, though. Its unsustainable.

EDIT: ou48A beat me to it.

[justinm]

I'm a producer, so it would certainly help my bottom line if we could export nat gas and lower the domestic supply. However, our gov't is crazy to allow us to export domestic energy resources.

[ou48A]

However, our gov't is crazy to allow us to export domestic energy resources.

I would much rather see the NG kept at home....... but we have got to get so many other things right before
companies are going to take big risk.

Think of the economic competitive advantage we would have in the world with our cheap abundant and secure supply of NG.
We could create value added products cheaper and employ hundreds of thousands with good jobs.

If much of our delivery system used CNG/LNG for their fuel it would create even more prosperity with cheaper prices.
It would almost be like a tax cut.

[Bellaboo]

I don't see prices moving much unless there is a change to our export laws, and that doesn't seem likely.

Let there be another major hurricane in the Gulf, such as Katrina, and prices will shoot to 13 bucks again, like they did in 2005.

God forbid.