CHK & NatGas: The Truth!
A lot of the market looks at Chesapeake as an oil play, but it is really a gas play producing 75% to 80% of their production in NatGas. CHK is the second largest NatGas producer in the US. They have gas hedged at $2.71 and oil at $47.36 so I would say they are fairly well positioned to have a great year compared to last. The weather is also in their favor since NASA predicts 2016 to be the hottest summer on record. It will be so hot in June July, August, and September that you will be able fry taco shells on your sidewalk.
Natural gas spending is down 50% in 2016, and that is after an additional decline of around 30% in 2015. That's 80% down since 2014!
The natural gas rig count is at the lowest level on record. Only 88 rigs are currently in operation. That is down a stunning 95% from the all-time highs in 2008.
Gas exports to Mexico continue to grow. In fact, exports to Mexico have grown for five consecutive years and ran above seasonal highs last year. 2016 is predicted to climb by 5% due to the heatwave coming the much of Mexico, the US and the rest of the world.
LNG will also skyrocket!
Forget all the negativity. Global warming is real and it's due to increasing CO2 emission! Given that gas has CO2 emissions 40-50% lower than coal and 25-35% lower than petroleum, releases far fewer greenhouse gases and local pollutants, and is the essential backup for wind and solar power, a cooler climate simply cannot come to pass unless we burn more gas. Lots more gas.
Do you own research. Don't listen to idiots. The world is on the verge of major structural increases in natural gas demand. Gas is the world’s fastest growing major fuel, and the big importers will require more imports. As a nation, we have an obligation to support our companies looking to export natural gas, because it helps to reduce global CO2 emissions, supplies modern energy to an overwhelmingly still poor and energy-starved world.
These are important and diverse concepts in our swiftly connecting planet where energy markets are increasingly based upon a complex combination of politics, economics, and security. Too many of the analysts and policymakers leading our energy/environment discussion have so pigeonholed and short-sighted their focus that they only see trees, not forests.
Solar and wind are the real future, Natural gas is the transition fuel! Demand must skyrocket or we will all know what hell feels like! There is no choice. Wood, coal, and crude must be all be phased out as quickly as humanly possible.
NatGas is the only fuel that can save this planet! There is no time to think it over or make a second choice.
Chesapeake, regardless of its current struggle, is a damned steal at these prices! NatGas is the future. CHK is the second largest NatGas producer in the US! It is prime for takeover by GE Oil and Gas and several other majors with deep pockets.
If you don't buy and hold this stock, you are a damned fool!
