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Here's a positive... Those institutions that bought in the last six months are not likely to sell. Many bought for under $2. They took a gamble that CHK could solve its problems knowing that this was a long term play.
The real drop in price started over a year ago. Most of the big losers dumped and were replaced. In other words, CHK shares have changed hands all the way down the drop to $1.70 per share. This would explain why the major share holders are not running out. They got in cheap because they believed that the damage was done by the warmest winter on record. They are right and will hold until NatGas rockets back to $3.00 plus.
They know Chesapeake is not going bankrupt. They talk to management on a weekly basis. They are not in a panic so why should we worry!
This summer looks like it will be a hot-roasting, high-humility season that will run up NatGas demand. I also expect some hurricanes to disrupt gas production, cause destruction that will raise employment for lay-off oil field workers in Texas and Louisiana.
Next winter should also be bitter cold with chest deep snow. This will boost NatGas to maybe $4 or even more. Mexico's demand will also skyrocket this summer.
I'm averages in CHK and $4.04 now so I could easily dump and take my loses,but I'm not going anywhere. You want my share, you'll have to prey them from my dying hand.
This puppy is going to turn around and hit $30.
WE got a combination of factors in play now.
!. At market close, we had a small increase in price confirmed by a 10% increase in volume. That is a weak positive signal.
2. We had institutions buying lifting the price. But this turned out to be a plus for the manipulators because it helped raise the price so they could clear their shorts at a higher profit. This is the part I missed yesterday. Slow rising prices helps the manipulator when the buyer runs out of money. The buying needs to go on most of day and not stop at noon. We need a steady up tic on ~100+ million shares before we can celebrate. We need to sell ~30 million shares in the first two hours. This will scare the manipulator and put an end to his bullshit.
3. The institutions bought the number of shares they wanted by noon so buying stopped. This opened the door for the manipulators to start shorting again.
4. We also had a number of disgruntle share holders throw in the towel when the prices started dropping -- another boost for the manipulators.
5. And we had day traders that bought early on rising gas prices, which took a dive later in the day causing more selling pressure at the wrong time.
6. We sold over 1.5 million shares in after hours with a 1.2% rise in price; however, at 4:10 pm a 1,324,341 trade was made at $4.01 per share. This was an institutional trade and must be considered a positive because it was made 7 cents above the prevailing price.
It might not seem like a positive day, but it is a step in the right direction simple because volume shows signs of moving up.
Talk about a mystery wrapped inside and enigma--the drop in price is difficult to explain. The only thing that comes to mind is the real buyers took a long lunch assuming that the shorts would run the stock down while they were gone and they could buy cheaper shares when they got back.
If this is indeed what is happening, the shorts are gonna get burnt good.
But the short sell side is acting desperate, trowing out a lot of shares.
On the other hand, the market maker has been playing with the bid and ask numbers so you have no idea what is the real buy or sell side.
Although it is frustrating, it is indeed very interesting to watch.
Of course, this could be two accounts with the same goal just selling back and forth between themselves,churning the stock to scare share holders into dumping.
I find the trading very difficult to even believe. Why would the seller not sell when the prices was much higher. Why is he desperate to sell now?
Whatever is going on, I think we are watching the final inning. The game will be over soon.
Lunch Hour in New York: Buyers went to get a few martinis. They be back in 10-15 minutes and accumulation will continue. (hopefully)
erdos, I agree. I've preached the virtues of CHK for weeks now. I sincerely believe that we have a $30 stock by January 2018, just 18 months away.
We've been under a bear raid by Barclays Bank, the biggest crooks on Wall Street.
We are approaching two hours of trading and we've already traded 14 million shares in a fairly normal pattern. We are up 6.7% -- and this move up is confirmed by volume! I have not seen this value sign before. This is why I kept doubling down. I have 60,000 shares that make me $600 for every penny the stock goes up. The knot in my stomach is gone and I feel like a new man.
I think the bear raid is over and the sellers are drying up. We should should head much higher, but that's just a gut feeling based on tick by tick observations. The price moves natural with NatGas it seems to be trading under normal circumstance. I see a move back to $4.60 really fast and then back up to $6 in less than 30 days.
NatGas is the key. I also see WTI hitting $50 and Brent at $52.00 but I don't know if they hold or slide back down. I see NatGas moving to $2.25 in 30 days. I also see 70% to 80% of CHK production in gas.
I just hope I'm right!
8.2 million shares, first hour! Price moving up, this is good.
browland, don't be so sure. The price is up and so is the volume. We have some institutions accumulating share now. If the bear raider don't get his short cleared and volume hold up we could see a nice pop.
Volume 5.5 million in 30 minutes. If volume holds, we will take out a lot of weak hands today.
Looks like we finally got some legitimate buyers and sellers! Lets hope it holds.
Wormwood, I added 20K yesterday simply because volume did not reach daily average.
When volume is low, but gains and losses are big, the professionals tend to get overly excited about a possible turn in market direction. That's because many have been taught that without strong volume, a market move is not valid. Check out the link below to learn how to interpret volume.
http://www.investopedia.com/articles/technical/02/082702.asp#ixzz48t4dv5ML
To confirm a market turnaround or trend reversal, the technical analyst must determine whether or not the measurements of price and volume momentum agree with each other. If they do not, it is a sure indicator of weakness in the trend, and thus a trend reversal may be well on the horizon. It also indicates manipulation.
The price rose and stayed up on the only day volume exceeded average. When the price dropped so did the volume.
Whoever is behind the manipulation is selling short to run the price down, and then reversing their short on the way back up. Then when they get their short reversed, they start selling again to run the price back down. There is also some selling from disgusted institutions. And some forced selling due to margin calls. This was the goal of the manipulator. But this kind of crapola does not last too long. Bargain hunters move and make it hard for the Manipulator to recoup his short on the way back up. This is what happened yesterday when Two Sigma Investments added 2.3 million shares, and Blue Ridge Capital bought 7 million shares. These bargain hunters enter at a low point so they are not likely to dump out on the next small loss -- they are far more likely to add shares.
These guys are sharp. They know the stock was under attack. That's why they held back until it got dirt cheap. They made a good deal. I expect to see other deep pockets jump in soon. Many are waiting for the raid to burn itself out. f I was smarter, that's what I would have done.
I'm now holding 60k at $4.03 per share, 8 cents above after-market close. I will dump half on the next strong move up and wait for the bastards to run it back down again. If things go as planned, I will average in at about $3.90 at tomorrow's close. I will keep playing this game until the raid has run out of stream or until I'm averaged in a 10 cents a share which ever comes first. I been through many of these raids. I hate the bastards but I can live with them. On the other hand, if volume runs high and price falls, my ass is in the wind!
To me, the low volume PROVES the major stock holders are not selling Chesapeake. They have the best analysts. They are in touch with management on a daily basis. You have to assume that they are fully aware of the future. If there was a bankruptcy looming, they would know it and volume would be over 150 million shares per day.
The 3 month average volume is 48,358,600 shares. With 7 hours of trading, the average is almost 7 million shares an hour. The first hour is usually shows the most volume.
What we are experiencing is a product of the crooked stock market and the failure of the crooked SEC. There is no possibility that the movement down can do permanent damage unless the major shareholders join the selling. And, since they have joined the selling by now, they are not likely to start now. In fact, more likely then not, major investors in CHK will start adding shares at these low prices.
My advise is to buy all you can afford.
heather, the key word in the malicious statement is:
"Chesapeake Energy accounts for 18 percent of Williams Companies’ EBITDA, and the analyst expects an impact of $400 million from a potential Bankruptcy." It's like saying the Super Volcano under Yellowstone National Part could potentially blow up and kill half the US Population. It just one more tactic of the lying bastards in the stock trading business.
Williams and Chesapeake are important partners; they need each other.
This is taken from WMBs earnings call link:
Sharon Lui, Wells Fargo Securities:
"Okay, great. And any update in terms of negotiations with Chesapeake on the rates?"
Alan Armstrong, Williams President & CEO answered:
"Sharon, I'll take that. I would just tell you that we continue to work hard with them to look for win-win opportunities. And again, we're pleased to get to do that with Chesapeake and consider them a very big and important customer. So we're always looking to find win-wins. We don't have anything specific to report on this quarter, however."
Williams ain't worried about Chesapeake and neither should we.
Heather... right on. I agree 100% And I keep saying this over and over. A falling price on low volume is MANIPULATION! All through the last 4-5 days, never once did volume reach normal. I'd bet my last dollar that Barclays is the market maker. They would have no trading expense and would not even have to pay for the shares since their inventory is on loan.
We need to get a lawyer and Sue the damn Market maker who ever he is.
I say this one more time. Real price NEVER moves up or down more than 1% unless the move is accompanied with an increase in volume above average.
Average volume is 48 million share per days.
I thing the bastards have to start buying back their shorts soon. Maybe today? Maybe after-market or maybe tomorrow.
What I can't believe is that the major share holders have not jumped in a defended the stock. I can't buy any more. I've ran out of money. I sure wish I could!
Milkman, CEO Lawler flatly denied rumors of a bankruptcy 2 days ago -- he said that Chesapeake and no plans to go bankrupt or to default on any of their dept. The have a $4 billion line of credit guaranteed until June 15 2017 without any audits whatsoever. The first payment they must meet is $341 million in February 2017.
Their slate is clean. They have at least 2 years to operate without any dept worries whatsoever. Seventy percent of the oil is hedged at $46.36; their gas production is hedged at $2.71.
The only thing to fear is fear!
Grab some cheap shares while you can. This stock always pops up big in the morning and slides down every day.
Barclays is selling short to run the stock down and them clearing their short and selling the shares at a high price. This trick will run out of steam in another day or so and volume will pick up.
Whatever you do... don't short or you will loss your butt!
A falling price is only confirmed by a increase in volume. Volume is less than normal. The stock is being manipulated. The bastards are getting away with it because the major investors are not jumping in. They are likely waiting until if gets a little cheaper. Or, they don't care about daily bounces in price... they are in for the long pull and so am I. If you have dry powder, buy all you can afford.
BatGas is moving back up now.
Day traders tracking Natgas up and down. This is not fundamentals. Major buyers will step in any moment now and run this stock up to $4.10. There is a lot of BS floating around about weak LNG sales. No big deal. WE have only one LNG shipment so whats the big deal? Weather is the important factor. We will have a hot humid summer with hurricanes hitting the Gulf States. NatGas will soar!
CHK trading down on NatGas scare bullshit and on manipulation. The shorts will have to clear before the close. This stock will come back up soon.
Now is the time to buy! When everyone is crying sale... buy buy buy
I got another 10K at $3.95!
This makes it a buying opportunity. I going to double down again.
Milkman,why should Chesapeake go Bankrupt? The have no debt due until next year!
I loaded more at $3.95
I can believe the stock trades so low of 50% of average volume. The major share holders ain't worried so why should I.
Were's the volume? Volume confirms the validity of price. Falling prices on low volume spells manipulation.
It's time to get serious and day trade this puppy!
NatGas takes big dive down 6 cents. There's no reason for the drop. Looks like a bit of manipulation. This kind of sell off often happens when someone is getting ready to take a big position. They start their buying effort by selling like crazy to cause longs to sell out at a cheaper price then they would have before the bear attack. I think NatGas will spike right back up. I picked up 10K at $6.58 so I put my money on the line. If I'm right, this will give CHK a boost a little later today.
CHK pre-market volume up nicely.
stocy101.... I sure do agree with you. Exxon Mobil needs to increase NatGas production because they got nothing big in crude. The big oil companies are going to suffer the next few years because there's no big oil plays for them to jump on due to low prices. NatGas on the other hand would be the perfect play. Chesapeake has a tremendous amount of acreage that could be developed quick if they had the cash. Some major with deep-pockets is gonna make a play for Chesapeake! The only two question in my mind is who and how much?
I'm sure that CHK is not going BK any time soon. They have already bought at least two years and could easily but another 2-3 years as long as NatGas moves up about $2.75 (a shoe-in).
I bet $15 per share would close the deal in the next few months.
CHK up 3% pre-market... I think we'll see a 5% pop on open and maybe 10% on the day if we get a little move up in NaTgAS
Crude at $70?
I think crude can hit $70 within 6 to 12 months. Here's why: The big projects that require $billions are getting canceled. For example, Shell canceled its plans to drill in the Antarctic. Lots of oil but also lots of investment. Before any major will invest big money in a crude project, they want to see prices hold near $100 for a couple of years. The problem is that the frackers will crank up at $70 and pump like crazy causing the price to drop back to $60. In other words, $60 to $70 is maximum price for crude until the frackers run out of drilling prospects. When the frackers burn out, Canadian oil sands will pick up the slack. In other words, the big massive projects with billions invested are dead in the water. I see crude range bound between $50 to $70 for the next 2 years
On the other hand, NatGas can increase to as high as $4.00 per Mcf if we are a bit lucky.
Chesapeake is 60% NatGas headed towards 80% NatGas, maybe 90%. I think CEO Lawler has been planning to target NatGas for a long time.
Lots of positive stuff on oil and NatGas
Crude up 2% this morning! Hope it stays up. NatGas down 2 cents but we still got plenty of time to move up.
http://www.fool.com/investing/general/2016/05/15/given-up-on-natural-gas-prices-here-is-a-significa.aspx?source=yahoo-2&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2
The experts say the Marcellus play will be off by 25% this year. CHK indicates that it can ramp up cheaply and extract 2.8 Billion cubic feet per day. Lots of talk about gas hitting $3.50 in December 2016. Wow... this is super positive.
http://seekingalpha.com/article/3975234-natural-gas-sleepy-beast?app=1&auth_param=1191vj:1bjj8ba:f0b7098fbaa83440789276f443a72fa8&uprof=44&dr=1#alt2
OPEC predicts oil rise to $53 this year to $70 in 2015.
http://www.theworldfolio.com/news/opec-report-predicts-oilprice-rise/4104/
I think WTI will be above $50 by next week and hit $70 by the end of 2017 or maybe sooner. Capex has been too low for far too long. The economy is starting to show positives signs of heating up. Deep-water drilling has almost stopped. Fracking can not keep pace with oil demand going forward.
Moody's downgraded practically every oil producer in the Middle East. Donald Trump will slap them with 20% to 30% import tax. OPEC is dead! They went too far trying to put US producers out of business. They were successful but this is gonna anger a lot of oil people. "Screw the Saudis" will become a popular saying.
The truth is we no business in the Middle East. We can produce our on oil and gas until solar and wind take over. The Saudis will wake up and realize that made a huge stupid mistake. I think they already know it!
browland1, I think GE's oil and gas division is looking to buy something big. I bet they are looking at Chesapeake. Crude oil has maybe another 20 years, but NatGas has a bright future for at least 50 years. GE is in wind power. You'd think they would also go with NatGas. CHK is the number #2 gas play behind Exon Mobil. They are 60/40 gas over oil. It looks like they are moving more and more towards gas. If they are looking at Halliburton, they are also looking at Chesapeake.
I used to work for GE back in the late 1950's as a mail boy.
WildcatDriller
I'm sorry sir... I went too far. I won't do it again. Us old guys got to stick together.
More good stuff!!!!
Henry hub shows January 2017 gas futures at $3.03 -- just 6.5 months away
Henry hub shows January 2018 gas futures at $3.21 -- Just 18 months away
Feast your eyes....
http://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html
Shorts will indeed tumble down Mount Chesapeake on their stupid butts.
If oil and gas price hold, I see a 10% pop coming Monday.
Best advice from a bull!
First read all the messages below.
If you are a stock investor with any brains, you will want to grab some Chesapeake shares.
Assuming oil and gas prices look stable, buy as many shares as you can afford in pre-market on Monday morning. If oil or gas looks like it might tumble, hold off and let CHK drop as low as it can and then execute your buy. Just make sure you don't jump too fast before you check oil and gas prices.
Put in a tight stop-loss to limit you down side. Plan on holding the stock for 30 days. If its survives this recent effort to manipulate its price, decide then how many more shares you willing to buy.
You are not gonna lose a lot with a tight stop-loss so don't worry. As the price moves up, move up the stop loss. If you get stop out, wait until the price stops falling and buy back your shares at a cheaper price.
If I'm right about Chesapeake and about the NatGas market going forward, this stock will be selling for $30 in 2 years.
I hope you make killing on this puppy
Even More Positive!
In an article earlier this month, I had told investors why Chesapeake Energy's (NYSE:CHK) dip is an opportunity to buy more shares given the initiatives adopted by the company to reduce its debt and lower its costs. But, in my opinion, there is another factor that will act as a tailwind for Chesapeake Energy that investors should not miss - a recovery in natural gas prices.
In fact, over the past couple of months, the Henry Hub natural gas price has been in turnaround mode. As shown in the chart below, the price of natural gas has increased over 28% since the beginning of March:
http://seekingalpha.com/article/3974815-chesapeake
More Positive Conclusions!
"I find it surprising to see that Chesapeake Energy (NYSE:CHK) shares have been battered badly in the past week, even though the company met the bottom line estimate in the first quarter that was reported on May 5. In pre-market trading, the shares were initially up over 6%, but an analyst note from Barclays sent the shares down almost 20% post earnings. Barclays believes that Chesapeake shares are worth just $1 despite the company making impressive progress to improve its operational and financial structure last quarter."
"In my opinion, this recent decline in Chesapeake shares is an opportunity for investors to buy more of the stock as the company is making moves in the right direction."
http://seekingalpha.com/article/3973138-miss-chesapeake-opportunity
A Positive Conclusion!
In my opinion, investors need to look past analysts' comments as Chesapeake Energy is actually delivering results as we can see in the points discussed above. So, I think that it makes sense to buy more shares of Chesapeake and capitalize on the recent weakness.
CHK shares have dipped massively in the past few days after Barclays slapped a $1 price target on the stock, but I think that the crash is overdone.
CHK is raising money smartly by selling assets such as the STACK play that account for just 5% of production and $20 million of EBITDA due to higher costs.
CHK has made modifications to its firm transportation agreements that will help achieve savings of approximately $650 million gross ($415 million net) over the term of the contracts.
CHK is spending capital on optimizing its completion techniques, tighter cluster spacings, higher proppant volumes, and extended lateral and superior subsurface targeting, leading to higher production at low capital costs.
http://seekingalpha.com/article/3973534-3-reasons-buying-chesapeakes-dip
SWN call for 25% production drop!
http://www.fool.com/investing/general/2016/05/14/even-this-natural-gas-producer-is-expecting-a-majo.aspx
The impact of this spending reduction on production is going to be significant. According to Southwestern's Q4 2015 earnings call back in February, Southwestern expects its production will be down 25% year on year by the end of December.
Forget about the DUCs. No one wants to invest money in fracking or drilling new wells as proven by the lowest rig count since the 1960s. Besides, no one has got any money anyway. And the banks ain't lending because they are taking the worse beating they have ever experienced in the history of the oil and gas industry.
And don't worry about the damned Saudis. When Trump is elected, he will slap an import duty of all OPEC oil and we can kiss this butt holes goodbye forever!
Can you picture the shorts losing their pants and sliding down Mount Chesapeake on the bare asses? ha ha ha ha ha I love it!
Sorry to post so much but I'm in a good mood finding lots of positives. I like posting because my memory is not what it used to be. I can go back next month and read my old stuff and see where I was right and where I wrong. Helps fine tune my stock picking.
Will GE bid for CHK?
GE is looking hard a Halliburton.
http://www.fool.com/investing/general/2016/01/16/with-oil-and-gas-down-why-is-general-electric-eyei.aspx
GE is moving onto the energy sector in a big way. They are into renewable. NatGas would make a perfect mix. There is talk that they are looking to acquire somebody big in oil and gas.
I think CHK would be the perfect fit!
Lorenzo Simonelli, President and CEO of GE Oil and Gas, said something very telling near the beginning of a recent presentation:
"We don't really focus on the oil price. We focus on the long-term elements of this industry, and the fundamentals, and when you look at the fundamentals: growing population means growing need for energy, increasing consumption of electricity, and at the end, the resources need to be extracted. So when you look at the long term as we come through this down cycle ... we feel good about oil and gas continuing to increase in demand."
Damn, this guys feel just like I do!
Simonelli is right: Oil and gas prices have been cyclical in the past and will probably continue to be cyclical in the future, so focusing on the long term is the only strategy for investors and corporations. In the case of GE, the size and diversity of the parent company helps to insulate it from some of the near-term concerns that smaller or less-diversified oil and gas services companies.
GE envisions its oil and gas division as a "full stream" company -- one that operates in all segments of the oil and gas industry: upstream (extraction), midstream (transportation and storage), and downstream (refining, processing, and distribution). They could build their own drilling rigs and augment GE's existing upstream businesses in onshore drilling trees and subsea production systems, risers, and blowout preventers.
Eventually, the US East Coast offshore will be re-opened to oil and gas production.
If GE does buy CHK, I wonder what kind of bid they would throw at the major share holders? $10... $15.... $20... The share holders would have to grab it. Humm.....
There are many other deep pockets that might take a big bite of CHK before it recovers to its old glory.
Is increasing oil production easy?
First, before I start, let me say one thing! Chesapeake is primarily chasing NatGas, not crude oil. NatGas prices will follow the weather.
In preparation for higher oil prices, producers report that they have hundreds of “drilled but uncompleted” (DUC) wells. The DUCs could be a quick way to increase production of gas and oil. For most of the industry, however, the problem is finding cash. No one is sitting on any excess capital. For years the industry borrowed heavily to finance its expansion, because it was failing to generate enough cash to cover investment in new wells. The warmest winter on recorded caught everyone in a cash squeeze. The supply of credit, whether from banks or the high-yield debt markets, has either dried up or is much more expensive than it was.
The weak producers are unwilling to sell assets to raise cash because the proceeds would go directly to their creditors. They are close to going belly up. Selling assets and paying down debt will not save them.
On March 8th Goodrich Petroleum, a shale oil-and-gas company, said it would postpone paying interest on its debt, as it puts pressure on creditors to exchange debt for equity in order to avoid a default. Three other oil firms, Chaparral Energy, Energy XXI and SandRidge Energy, have also recently missed debt payments. Brian Gibbons of CreditSights, a debt-research firm, says 26 oil-related bond issuers either filed for Chapter 11 bankruptcy or had distressed-debt exchanges last year. Their DUCs will still be DUCs for many more years.
Those firms still saddled with revolving bank loans are also bracing for the next twice-yearly reassessment of borrowing limits, due in June. These depend on valuations of shale firms’ reserves, and could lead to more liquidation.
Chesapeake does not have this problem. Their $4 billion credit line is guaranteed until June 15, 2017 without any reassessment.
Some say forget that working rigs are at their lowest level in many decades. They says DUCs will be fracked and this will lower prices. But prices will need to rally above $60 a barrel to lure capital back in. Bobby Tudor of Tudor, Pickering, Holt, an energy-focused investment bank, believes that at $40 a barrel production will continue to decline, at $50 it would flatten out, and only at $60 will production increase.
“Drilling wells at today’s commodity prices is still destruction of capital,” he argues. One further wrinkle: as oil prices increase, so can costs. Those who think that nimble shale producers will be able to move the global oil price up and down just by turning the taps on and off are wrong. Their financial backers will be the ones calling the shots.
Chesapeake does not have this problem. Their $4 billion credit line is guaranteed until June 15, 2017 without any reassessments.
No reassessments for a full year is a big deal!
Furthermore, Chesapeake will not spend money fracking DUCs as long as the prices do not warrant the expense. Their new CEO Lawler is a pro at management production to maximize profit. That is what he is famous for!
I think this stock will ease back up to about $6 and hold until NatGas hits $2.30 and then we will see movement to $7 and then another hold. If NatGas hits $3 in December, CVHK with top $15.
Overall, EIA expects production will rise by only 0.9% in 2016 and by 2.2% in 2017.
EIA expects natural gas exports by pipeline to Mexico will increase because of growing demand from Mexico's electric power sector. EIA projects LNG gross exports will increase to an average of 0.5 Bcf/d in 2016, with the startup of Cheniere's Sabine Pass LNG liquefaction plant in Louisiana, which sent out its first cargo in February 2016. EIA projects gross LNG exports will average 1.3 Bcf/d in 2017, as Sabine Pass ramps up its capacity.
Chesapeake does not have a problem because most of their production is hedges at good prices. If the price goes above the hedge, they get the higher price.
At $4.10 a share, CHK is a steal! I'm setting on 45K share right now and am almost ready to double again. I just need to do another 2-3 weeks of research. NOAA’s Climate Prediction Center says there is a 75 percent chance of “La Niña” conditions in the Pacific by the peak of hurricane season in September. This increases the chance of hurricanes in the GOM. We could see a lot of flooding with high winds that could hamper production. If we do get a La Nina you can expect a lot more humidity from June through September, which will increase power demand. Next winter will not be bitter cold but La Nina will bring many feet of snow that will pop NatGas price way up. In other words, CHK could be a day-traders dream stock if you do your research.
WildcatDriller: I don't know how old you are but I venture to say that I been investing in oil and gas since before you were born! I'm 75 years old and bought my first oil stock in 1968. I started daytrading the oil patch online in 1993. I bought RIG in 1995 at $15 and sold it in 2007 for $125.00 per share. I've made millions betting heavy on a beaten down energy stock when everyone else was selling. I'll tell you first hand, if you wanted get rich, buy beaten down high-flying energy stocks. This business is BOOM or BUST. We are just now coming out of the BUST. When the BOOM gets rolling, CHK will fly high. I see $30 in 2 years!
No one knows for sure which way oil and gas prices will run, yet you say that you will bet anyone that oil will see 35.00 a barrel or lower before we see 75.00 and that nat gas will return earlier this year to 1.60ish.
Your bet that oil will fall $10 before it jumps $30 is not a fair bet. A fair bet would be $30 down or $30 up. You also say that NatGas will drop to $1.60 "early this year." "Early this year" has already come and gone.
Are you okay, son? You're not making a lot of sense.
Then, you say that "natural gas will top out at around 2.40 and oil around the 52.00 mark." Come on now... You not doing too well. If NatGas is gonna hit $1.60 early this year, how do you figure it will top out at $2.40? You need to see a doctor -- your brain is misfiring.
And you say that this is "why hedges are being added in an aggressive manner." So if hedges are being added, why should CHK longs worry?
You also asked: "Did anyone notice the triangle that is almost complete on the 15 min chart?" What 15 min chart you talking about? Son, you are either sick, drunk or drugged out.
You also say you talk to Chesapeake management on a daily basis but everything else you said is nutty so I just don't believe one word!
I'm not trying to shoot you down. You've done a good job of doing that on your own. I'm just worried about your health. Get a check up before you lose all your money.
Chesapeake owes money but it does not all fall due tomorrow. As of March 31, 2016, they had approximately $9.425 billion principal amount of debt outstanding, of which $1.625 billion matures in 2017 (including $344 million of maturities in January 2017, $902 million in May 2017 and $379 million in August 2017) and $878 million that matures in 2018 (10Q).
There are no worries until January 2017, at which time NatGas will be selling at its top price of the year. These paybacks can also be pushed forward if need be. There is always wiggle room.
To clear the road ahead, Chesapeake made deals with its bankers to extend its open line of credit for $4 billion to 15 June 2017 (10Q).
How are they gonna pay this back? First off, the $4 billion is not a loan. It is merely a guaranteed line of credit that Chesapeake can use if needed. But they do need to either renegotiate or pay $1.6 billion during 2017. They can pay it off with just the production coming from the Marcellus play!
On Page #4 of the conference call transcript, Brian Singer with Goldman Sachs ask:
"I wanted to just get some updates on how you're thinking about capital allocation and backlog in a couple of the natural gas plays. First, where you stand with curtailed wells and - or curtailed production as well as uncompleted wells in the Marcellus."
Frank Patterson answered:
"Hey, Brian. This is Frank Patterson. In the Marcellus, we're making about 1.8 billion cubic feet a day. We've seen a little bit of uptick in price recently, so we're doing well there. We have about 350 million cubic feet a day curtailed. These are wells that we can ratchet up as the market allows. And we have about 200 million cubic feet a day on wells that need minor repairs to bring back on line. So a substantial amount of gas available to us at a very, very minimal cost associated with that. And we'll manage that as the market allows."
"We have about 100 wells sitting back waiting to be fracked. So that would give us another 450 million cubic feet a day. So we have a little bit over a billion cubic feet a day available to us at a pretty reasonable cost."
According to the above, Chesapeake is now producing a 1.8 billion cubic feet per day in the Marcellus play alone with an addition 1 billion cubic feet per day available a reasonable cost. In other words, they could ramp up the Marcellus play to 2.8 billion cubic feet per day.
Let’s think only about Marcellus. Chesapeake hedged its 2016 production as reported on page #3 of their 1Q16 conference call:
"Since we last spoke to you in February, we've layered on additional hedges for 2016 to help increase our cash flow. We have approximately 476 billion cubic feet of our remaining 2016 gas production hedged at $2.71 and approximately 18.2 million barrels of our remaining 2016 oil production hedged at $46.32 per barrel, representing 64% and 69% of our Q2 through Q4 2016 gas and oil volumes respectively. We have also started to add some 2017 hedges at recent prices."
These hedges mean that Chesapeake’s profits are protected from a fall in both oil and gas prices. All the doomsday preachers are saying oil and gas will collapse. So what? It means nothing to Chesapeake with hedges in place.
You do the math. What is the gross sales of 2.8 billion cubic feet per day at the hedged price of $2.71 per million cubic feet? The numbers for Marcellus alone look astronomical to me, but you do the numbers yourself. I get dizzy around all those zeros.
The way I see it, the hedges and Chesapeake's high production is the main reason their banks extended the $4 billion credit line.
I know the banks and the major share holders are both smarter than the shorts. In fact, I think the shorts are downright stupid.
Aubrey McClendon, the former CEO of Chesapeake Energy, and the man credited for starting the fracking industry, purchased far too many oil and gas leases in 2013. He spent money like a drunken sailor. His board finally fired him. Then along came 2015 and the warmest winter on record. These two factors, one human stupidity and the other a force of nature, combined to put Chesapeake Energy in a financial jam. But this does not mean they cannot recover. As a reminder, Chesapeake was the #2 gas producer behind Exxon Mobil for years, and can easily made a comeback, especially if natural gas rises as expected.
Buying Chesapeake at $4.10 is a bet on the future of the US oil and gas business. If the oil patch turns north, you will make a killing. If not, put a stop-loss order in at $3.60. You could loss $0.50 a share, or you might make $29.50 profit because this stock is headed to $30 on the turn around. These are better odds than you can get with any stock on the market.
Don’t be a fool… get your toe wet Monday morning!
You can listen to the BS from the shorts or you can listen to my BS. Better yet, listen to the majority of CHK's share holders.
Where can you listen to the major share holders?
Just check the volume of shares sold over the last week. Not one day did the volume reach above average clearly indicating that the major share holders were not selling. They were communicating with management and no doubt approved the recent deal before it was made. If they are not selling, why should you?
Volume NEVER exceeded average on any day of this sell off.
And if you watched tick by tick as compared to the up and down movement of oil, you would see that most volume was churn by day-traders, me included. Volume is one of the best tell-tell signs in stock investing. Price moves on low volume are meaningless.
Much of the fall could have been forced liquidation by brokerage houses that don't margin below $5.
Volume is needed to confirm price. Low volume and a falling price signals manipulation. Major investors did not sell. They have billions invested. They have the best stock pickers money can buy. Lets give them credit for not being stupid.
By the way, last Friday's volume was 50% below average even with a lot of day-trading going on. This signals a reverse of the trend.
I think the major share holders know this is a raid on Chesapeake by Barclays and Barrons! I also think they are setting back waiting until the raid runs out of steam and then they will step in and buy up a hundred million shares at dirt cheap prices, catching the shorts in a nice squeeze.
Wouldn't that be nice to see --- ten thousand bloody shorts sliding down Mount Chesapeake.
I feel certain that CHK will not drop blow $3.90; I'd even bet it don't go below $4. Besides this advice is for novice. I don't want them to lose more than $25. To me, most new traders can afford to lose $25. Of course, if I used a stop loss on this stock, which I don't, I would set it at $3.50.
In my opinion, this is a long term play and prepared to set it out for 2-3 years if I have to, maybe longer if my investment goals are meet. On the other hand, if CEO Lawler don't get the share price to $15 by this time next year, I think I'll pull the plug. But I believe he will do it by Christmas. He is known in the business as one of the best production managers ever. I read a lot about this guy... all good.
I'm also very sincere when I say the CHK at $4.10 is the best buy I have ran into in 30 years of tradings. The lease acreage this company controls is huge. If gas prices run up to $3.00 this acreage will be worth a fortune. I just hope they don't have to sell too much acreage to pay down debt.
I watch it trade tick by tick for 5 days now. Friday's volume was only 50% of average. All the technical signals are point up on Monday. We should move up strong as long as oil and gas don't crash.
There is also a lot of producers closing down and the rig count is the lowest its been since the 1950s.
The 10-day weather report shows some hot humid days and cold damp nights so I think gas will be in good demand.
https://weather.com/maps/tendayforecast