Chesapeake Energy Corp (CHK)

[dwms07]

Big Incentive to Buy CHK!

The future is natgas. CHK is the 2nd largest natgas producer in the US and the 8th largest in the world. The company controls over 7 million acres of exploitable deposits. In fact, the big reason to reduce their debt is to keep a hostile bidder from buying their putable debt, demanding payment, and forcing them into bankruptcy. Such a move would force them to sell at a cheap price.

Getting rid of certain putable debt keeps the vultures at bay. The new management has done a great job all the way around. Bankruptcy is off the table!

The reason you have not seen an offer is because buyers were not sure of this winter! If they bid heavy and we had a warm heating season; the new buyer would be in deep trouble. Now that it looks like we will get a bitter cold winter, we could indeed see a buy bid any day now. My guess is somewhere near $20 per share as a starting bid. But I think it would take $25 to close a deal!