$CHK,...Chesapeake's latest deal improves and simplifies balance sheet, analyst says
Chesapeake Energy’s (CHK +1.3%) decision to sell some assets to privately-held FourPoint Energy for $840M gets a thumbs-up from Wunderlich’s Jason Wangler, who says the deal should help improve the balance sheet while keeping the upside potential on CHK’s core assets.
The deal likely reduces the balance and payments of its CHK Cleveland Tonkawa, Wangler says, as three tranches of payments come in as the deal is completed, and pricing looks "decent" given the current environment.
Wunderlich says it likes CHK’s execution and believe so much has been made of the potential pitfalls that many forget the potential catalysts that could drive value, such as accretive acquisitions using the strong liquidity position, potential sales to further improve the balance sheet, and reducing its gathering and takeaway costs.
invest at your own risk, based on your own due diligence, at your own risk tolerance
