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Healthy Move!
Over 5 million shares traded is 30 minutes. I just hope the selling stays hot and heavy since there is zero fundamental reason to sell out! This is like a stupid panic attack by weak holders.
Every stock needs to get rid of its weak shares. It's like cleaning your bowels. New shares coming in have a fresh new outlook. They plan to stick around and ride CHK to the top!
What you are about to see soon is that all the panic shares will start to dry up and real buyers will step up and gobble up the bargin shares. I just wish I had more dry powder.
Brexit... phooey!
just added 20k and $4.10
crude price drop is not a fundamental! Fear is all we have to worry about.
Crude is falling because money is selling out of crude and going to a safe haven during the bullshit over Brexit, which means zero to Chesapeake Energy. When this shit is over and the UK leaves the EU, things will return to normal. This is nothing more than fear instigated by big market houses and Bloombergs TV. They have to create churn to make millions so they use fear of the world coming to an end to scare investors to move out of stocks and go in cash or gold and then go back to stocks. Churn! Churn! Churn!
I think oil and nat gas are both standing up honorably.
now is the time to load the wagon!
Strange Downgrade????
A tiny bit of bad news followed by a ton of positives!
A number of large investors recently bought and sold shares of CHK. Franklin Resources Inc. increased its position in shares of Chesapeake Energy by 27.2% in the first quarter. Franklin Resources Inc. now owns 63,461,923 shares of the oil and gas exploration company’s stock worth $261,464,000 after buying an additional 13,572,132 shares in the last quarter. Harris Associates L P boosted its position in Chesapeake Energy by 13.1% in the fourth quarter. Harris Associates L P now owns 50,304,650 shares of the oil and gas exploration company’s stock valued at $226,371,000 after buying an additional 5,826,425 shares during the period. Norges Bank bought a new position in Chesapeake Energy during the fourth quarter valued at $25,055,000. South Dakota Investment Council boosted its position in Chesapeake Energy by 4.3% in the fourth quarter. South Dakota Investment Council now owns 5,266,867 shares of the oil and gas exploration company’s stock valued at $23,701,000 after buying an additional 215,500 shares during the period. Finally, OppenheimerFunds Inc. boosted its position in Chesapeake Energy by 75.1% in the fourth quarter. OppenheimerFunds Inc. now owns 5,021,633 shares of the oil and gas exploration company’s stock valued at $22,578,000 after buying an additional 2,154,181 shares during the period.
http://www.lmkat.com/2016-06-14-chesapeake-energy-co-chk-price-target-cut-to-4-00/
UPBEAT REPORT FOR NAT GAS!
Here's my prelude:
A lot of what this guy writes about is true. At this moment, nat gas is not profitable at $3/mmBtu considering all the expenses that go into opening a well. Of course, once the well has returned it's cost, then there is a nice profit. Therefore, the idea is to drill wells that are more likely to surrender ample flow of nat gas for longer periods of time.
This is where the new lateral drilling techniques pay off. (Do your own research on lateral drilling for nat gas.)
Here's the problems for right now!
#1. Producers have no money or little credit and drillers can not afford to drill on the if come.
#2. There is a shortage of tier 1 drilling rigs needed to drill the right hole with lots of laterals.
Bottomline is that prices will indeed overshoot normal prices until production can catch up to demand (if the weather favors demand). We are headed right now into the hottest, most humid year on record. Henry Hub futures prices for January 2017 is $3.25/mmBtu assuming that we enter the heating season with a greater than normal amount of nat gas in storage. But, if power demand for air conditioning this summer draws down the over supply, then the ball game changes. This also assumes we have no abnormal cold this winter and no supply interruptions from a lot of hurricanes and deep snow storms. This is also assuming that tier 1 drilling increases drastically in the next few months.
The EIA and the Natural Gas Supply Association are both saying all over the internet that storage levels will be high going into the heating season. My take is that they do not want to scare the power plants into switching back to coal so they pretend there will be plenty of gas for the winter. They compare 2015, when 232 rigs were drilling for gas, with 2016 when only 83 rigs are currently drilling for gas. Funny thing is they don't tell us if the 85 rigs are tier 1 or not. They could be workover rigs cleaning up the DUCs.
It they miss the call, nat gas can easily hit $6/mmBtu. And time is running out! Drilling is running far behind schedule. Frankly, I do not see how a nat gas shortage can be averted. I'm betting we pass $4/mmBtu in September and $5/mmBtu is January.
http://oilpro.com/post/25128/tailwinds-natural-gas?utm_source=DailyNewsletter&utm_medium=email&utm_campaign=newsletter&utm_term=2016-06-15&utm_content=Article_2_txt
Is this good news or bad news?
732 million shares outstanding and, for the first time in 2016, we get a notice that a fund sold 8 million shares. LINK
Why? Who knows? There are hundreds of reasons to sell and only one not to sell!
Notice also in this news release the following:
Heading into the second quarter of 2016, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a 3% decline from the end of 2015. Carl Icahn’s Icahn Capital LP had the biggest position in Chesapeake Energy Corporation (NYSE:CHK) on March 31, worth close to $301 million, while Robert Pitts of Steadfast Capital Management was next with a $34.2 million position. Some other Chesapeake investors in our database included D E Shaw, John Griffin’s Blue Ridge Capital, and Sander Gerber’s Hudson Bay Capital Management. Mr. Hawkins’ position was valued at over $255 million on March 31.
In other words, with all the naysayers beating up on Chesapeake coupled with the bad news and doomsday reports, we only lost 3% of our long hedge funds. Now I remind you... there are hundreds of reasons to sell but only one to hold tight to your shares.
What you are looking at here is absolute proof that 97% of the long hedge funds are hanging tight to CHK because they are banking on a recovery.
Should you turn your back and walk away or should you buy in and hang on too?
One Trillion Dollars in Spending Cuts!
Spending keeps getting cut. "The deepest cuts have occurred in the U.S. Lower 48, the consultancy said, with the most dramatic impact on U.S. shale. Over half of the capex spend ($125 billion) has been cut from 2016-2017, and over $200 billion of additional cuts are anticipated out to 2020," WoodMac said. LINK
In a lot of downturns, the producers overdo the spending cuts to save their financial ass and we end up with a shortage and a steep rise in prices simply because it could take up to three years to get production and demand balanced again.
The longer the oil and gas market struggles with cheap fuel prices, the higher the spike up will be.
Its disgusting to ride such a long downturn but the rewards seem to be much greater the longer the cheap prices last.
I see WTI going back to $85 minimum and Nat Gas going to $5 plus simply because strong recoveries always follow long-suffering down trends.
I know it's tough to hang on but something will break our way soon.
I would love to sell out on the pop but I am too fearful. I've watch CHK run up and then run back down so many times and have made money day trading it. But my gut tells me that the big boys are wanting to get into nat gas going forward. I think it is under accumulation right now. Look at the 10 day forecast; it is hot as hell and getting hotter. Nat gas demand for electric is going to be strong. There is not enough tier 1 rigs--gas drilling is at a 50 year low with only 3 stinking rigs added last report. The number is rigs drilling for gas is 67% less than in 2015. Gas price must rise because demand is gonna outstrip supply in a big way. I would not be surprised to see gas spike to $6 and maybe higher in January 2017.
I also have feeling in my gut that Chesapeake will announce some very good news really soon.
swampboots, oil and gasoline inventories down! This should boost CHK and confirm what I said earlier.
Oil is under pressure due to Brexit, not fundamentals.
No worry over lower oil prices!
#1: CHK is hedged through 2016 at $47.66 per barrel! No fear needed here!
#2: Traders worried about the collapse of the EU over Brexit, which is completely stupid.
#3 Notice that Brent crude is down the most because Brent is the heaviest traded in Europe.
#4. CHK is a nat gas producers and nat gas is up to $2.62/mmBtu.
#5. There is nothing to worry about but fear itself!
#6. The market needs something to worry about so that when this is over, jubilee will return and prices will soar!
#7. On by the way, Exxon Mobil is down 2/10th of one percent... really scary!
Why Cheap Shale Gas Will End Soon!
http://oilprice.com/Energy/Energy-General/Why-Cheap-Shale-Gas-Will-End-Soon.html
The Oil Futures Market Tells Us The Glut Is Over!
http://oilprice.com/Energy/Energy-General/The-Oil-Futures-Market-Tells-Us-The-Glut-Is-Over.html
Why We Need $120 Oil
http://oilprice.com/Energy/Oil-Prices/Why-We-Need-120-Oil.html
Crude could hit $85 by end of 2016!
http://oilprice.com/Latest-Energy-News/World-News/Rothman-Oil-Prices-to-Surge-To-Over-85-By-End-of-2016.html
HERE IS A SHOCKER!
In the US, 87 rigs were drilling for gas on 27 May 2016. The count one year ago (2015) was 225 active rigs. In other words, the active rig count in 2016 is down 138 rigs over 2015. Said differently, the rig count is 2016 is 67% lower than it was on 27 May 2015. link
Now let's look at supply, demand, and projected prices according to the experts.
On June 7, 2016, the EIA forecast (link) that the U.S. will consume an average 76.6 Bcf/d in 2016, compared with 75.3 Bcf/d in 2015. In other words, we will use 1.3 Bcf/d more in 2016 than we did in 2015. Overall, the EIA expects US production to increase by 1.0% in 2016. On top of this, EIA projects LNG gross exports will rise to an average of 0.5 Bcf/d in 2016. Exports to Mexico alone will be close to 4.0 Bcf/d in 2016. In other words exports coupled with US demand will exceed 80 Bcf/d in 2016, and supposedly production will rise 1% with 67% less rigs working than were working in 2015.
One other strange point: If you go down low of the EIA page you will see a chart the estimates prices for 2016. Run your cursor along the average projected price for June 2016 (current month) and you see the average projected price is $2.01; however, the price was already above $2.60 before the chart was released.
I don't have time to go into detail, but both the EIA and the National Gas Supply Association are putting out fabricated projections calling for "downward price pressure on natural gas in 2016 over 2015." And, as of now, we have over 50% less rigs drilling for gas.
I wonder how many investors read this garbage and back away from natural gas because of these outright lies?
There's a lot of figures to compare and a lot of research, but I don't have time or energy to waste with this junk. But I do have a obligation to those that read my rantings to put forth balanced comments. You read this stuff and make up your own mind.link
My take in that they do not want to scare power producers into switching back to coal.
The truth is that if nat gas does not rise to $5/mmBtu, the natural gas industry can not survive. I remember years ago when I invested in nat gas with it was $8/mmBtu. That's when the name "Widow Maker" got started. Gas could go from $5 to $12 and back to $5 in less than 2-3 months. You could make a killing or get killed just on your luck!
swampboots,what happens if an offer of $15 per share comes in tomorrow? Or, how bout an announce of really good news? ZIPPY ZIP to a double and you'll be kicking yourself in the butt.
I think the drop in crude prices coupled with yesterday's 32 million shares sold revealed that CHK's longs don't want to sell much cheaper than current prices. The stock traps a lot tighter than it did a few months ago. Looks like longs are not so scared as they used to be.
And, you and I both know that 2 months from now the outcome of Brexit will make no difference to CHK prices whatsoever.
I sold out at $4.65 thinking in would come back down. It went to $5 instead. It finally dropped and I got back in at $4.45 but the worry I would miss out on a run to $6 was not worth it.
Look at the 10-day forecast. link The daytime temperatures looks like August during a heat wave. This is gonna pull a lot of nat gas out of storage and summer has just begun. Wait until August and September. And... this ain't dry heat; the humidity is also high. The humidity is what makes everyone miserable. Summer demand will return the storage level to below average going into the winter heating season.
Then there is Mexico's demand. The shipments to Mexico have been up a whopping 25% every month so far in 2016. That's a BIG increase. link
Demand from Mexico alone with clear out any excess storage left over from the El Nino winter of 2015.
Then there's LNG demand. LNG suppliers have signed contracts that must be delivered. The wider Panama Canal opens is July which will cut tanker fuel coast in half for deliveries to Asia. LNG demand is not expected to run away from the market but it not disappear either. It will likely be up by 10%
Here's another gigantic problem for raising gas production to meet demand: Gas producers all want to drill wells with many lateral pipes running out from one deep vertical well as shown in this video link. This takes the latest tier 1 rigs which are limited in supply. On top of this, many producers don't have much money and no bank credit. Drilling a well with lots of laterals makes the well produce much longer and drastically lowers the cost of the gas making far more profit per well. But everybody's being over-cautious now so the drilling has not even started. The number of rigs drilling for gas is at a 50 year low.
I could go on and on with facts that indicate a shortage of nat gas and a huge rise in prices. I expect at least $5 by January 2017 and more likely $6 and maybe even a spiked to $8 if we get a deep snow along the East Coast.
Here's another point: If La Nino comes as many think, it will hold the northern jet stream along the Canadian border and make the northern states and Canada colder then a well-drillers butt in the dead of winter. Canada has no chance to keep up with demand and will have to import from the US instead of the other way around. La Nino will cause it to bit a bit warmer in the Southern States, but it will slow the upper winds in the southern jet stream and allow many more storms to form in the Central Atlantic. Texas will get some big category 5 hurricanes and the US East Coast from Northern Florida all the way to Canada will get many blowing snow storms. The temperature might be a tad warmer but the weather will be miserable keeping folks inside next to the gas furnace.
So screw around and wait for any entry point below $4 and you might???? get lucky. You could also be left at the gate as the train slowly pulls away! I'm staying right where I am, averaged in at $4.45 -- I'm even going to do all I can to not even watch it trade.
BE SURE TO READ MY NEXT POST!
girlfriend, the best way for me to remember my investment research is to write it down. I could write in private, but it's more challenging to make the predictions public.
By the way, I have written two books. The first was published by Simon and Schuster in the late 1980's. The second one will be ready hopefully in 3-4 months if I can get over this obsession with picking the right stock for the boom I see coming in natural gas. I'm averaged in CHK at $4.45 and not comfortable enough to let it play out without constant research. It's an obsession that I will be able to break when CHK reaches $6. When that happens, I'll put in stop losses and let my obsession drift to another subject. I've been this way all my life.
By the way, I dumped PDS at a loss just to pick up more CHK. I like PDS but I think they are 2-3 months away from the big move. As far as I'm concerned now, CHK is a $10 stock in January 2017 as long as the weather tracks predictions.
WHY BUY CHK?
The nat gas market is heating up. The only way to meet demand is drill, drill, drill, and drill some more.
BUT... in order to ensure that the new wells will be profitable if nat gas prices do not rise above $3, Chesapeake and other producers are opting to drill gas wells with lots of long laterals. The well is drilled down to the depth of the selected shale rock then horizontal drilling digs many holes going in 4 to 6 directions like the spokes on an old wagon wheel. These holes are drilled on "concrete pads." All these extra long laterals produce more gas per well bring the cost of each cubic foot down extremely low. And, the wells produce longer.
Here's the problems!
Number one, most gas producers don't have the money to ramp up a massive drilling program and the banks are not gonna loan them any money because they already owe too much.
Number two, the tier 1 drilling rigs needed to drill the long laterals and "walk" around on the pad are in short supply. Tier 2 and 3 rigs cannot do the job--the gas they produce cost more than $3/mmBtu.
Number three, drillers do not have the money to extend credit to producers.
Number four, the DUCs drilled several years ago were drilled just to increase the potential reserves of the producer so that the producer could borrow more money from the banks. Whether these DUCs can produce enough gas is in serious doubt.
Number five, the number of working rigs drilling for gas has dropped to a 50 year low. It will take 2-3 months before drillers can mobilize their fleets and then another 2-3 months before the gas can get to the market. You're looking at 6 months before and new supply comes online. That puts us into the start of 2017 before extra nat gas can be injected back into storage for winter demand. This is why I talk $5/mmBtu by January 2017 and why I set a $10 price target on CHK in the same month.
Number six, many oil plays strike gas, but the gas must be burnt off because they are no pipelines to deliver it to market.
Why Buy CHK?
First, if you go back and read all my post you will see that I am about 2 months ahead of all the forecasters simply because I am an obsessed fanatic researcher and usually ahead of everyone else.
As you all should know, CHK producers 80% natural gas and 20% Crude. Natural gas production is falling and prices are going up and will continue to rise until they hit at least $5 and maybe $6.
Here's why! This summer is gonna be hotter than hell and a lot of gas will be burnt by electric plants trying to run all the air conditioners. Exports to Mexico are going up fast. LNG could see a big boost this summer because the new deeper and wider Panama Canal will open in July allowing big gas tankers to reach the Pacific Ocean and Asia via the Gulf of Mexico. This will cut their fuel bill in half. Hawaii is also converting their power plants to LNG to cut emissions.
The Chemical industry also uses a lot of nat gas. Before natural gas can be used as a fuel, it must be processed to remove impurities, including water, to meet the specifications of marketable natural gas. The by-products of this processing include: ethane, propane, butanes, pentanes, and higher molecular weight hydrocarbons, hydrogen sulfide (which may be converted into pure sulfur), carbon dioxide (CO2), water vapor, and sometimes helium and nitrogen.
Most of the chemicals are used by the chemical industry. The one by-product that needs to be removed to make nat gas the perfect fuel is CO2. It has recently been proven that the exhaust gases from a large power plant can be pumped into underground caverns (Basaltic rock). In less than 2 years, the CO2 converts into harmless carbonate rock. In other words, in less than 10 years, power plants using natural gas will be 100% pollution free. This will turn nat gas into the #1 fuel of the modern age.
Besides LNG, conversion of natural gas into other liquid products via gas-to-liquids (GTL) technologies is relatively easy. GTL technologies can convert natural gas into liquids products such as gasoline, diesel or jet fuel. A variety of GTL technologies have been developed, including Fischer–Tropsch (F–T), methanol to gasoline (MTG) and STG+. F–T produces a synthetic crude that can be further refined into finished products, while MTG can produce synthetic gasoline from natural gas. STG+ can produce drop-in gasoline, diesel, jet fuel and aromatic chemicals directly from natural gas via a single-loop process. In 2011, Royal Dutch Shell’s 140,000 barrel per day F–T plant went into operation in Qatar.
In other words, solar and wind have some really stiff competition from nat gas as long as it is plentiful. Power plants will be foolish not to locate near of bed of basaltic rock so that they can become even clearer than solar and less ugly than wind. Nat Gas is the future!
They say that coal will SLOWLY phase out and be replaced by nat gas. But I don't believe that "SLOWLY" is the right word. Coal is a nasty fuel. Natural gas (Methane) produces 4 molecules of CO2 and 1 molecule of water vapor when it is burnt... no other pollutants. The CO2 can be scrubbed by injecting the exhaust into the ground and then nat gas becomes the cleanest fuel possible.
Since CO2 can be turned into a harmless hard substance, science will be racing to find a faster way to convert it. No telling what the future will bring for nat gas.
This is not going to happen overnight but solar and wind will not take over until nat gas production peaks--likely in the year 2116.
You can bet that what you read above is old news to the majors, like Shell, Exxon, and the rest. They got pencil-pusher scientists that figure all these angles out years in advance. This means that if any of the majors want to get into the nat gas business, the best and fastest way is to make a strong bid to buyout Chesapeake now while the price is cheap. I bet if they stuck $15 to $20 per share in front of shareholders, the could close the deal. But if they wait a year or two, it will cost them double!
To me, this is the best investment I have ever seen. All we got to do is ride out the volatility.
By the way, it's not Chesapeake I like; its the nat gas market. I picked Chesapeake simply because I think it has the best chance to triple in the next 2 years. There is something special about being the second largest producer of nat gas in the US when the market is turning red hot; it's like the management team and the investors all expect the stock to return to its old glory days. I do for sure!
Why The Bounce In Natural Gas Could Just Be Getting Started
Bryan Rich
CONTRIBUTOR
Opinions expressed by Forbes Contributors are their own.
On Tuesday we talked about the quiet bull market in commodities. Today we want to talk about one specific commodity that has been lagging the sharp rebound in oil, but is starting to make a big-time move. It’s natural gas. This is an area with some beaten up stocks that have the potential for huge bounce backs.
Natural gas today was up almost 6% to a six-month high. The U.S. Energy Information Administration said in its weekly report that natural gas storage rose less than what analysts had forecast. But that was just an extra kick for a market that has been moving aggressively higher in the past NINE days–up 37%.
Now, we should note, nat gas is a market that has some incredible swings. Over the past three years it has traded as high as $6.50 and as low as $1.64.
You can see we’re coming off of a very low base. And the moves in this commodity can be dramatic.
Three months ago natural gas was continuing to slide, even as oil was staging a big bounce. But natural gas has now bounced 58% after sniffing around near the all-time lows. Meanwhile, oil has doubled.
Based on the backdrop for oil, broader commodities and the economy we’ve been discussing, and acknowledging the history of natural gas prices, we could be looking at the early stages of a big run in nat gas prices.
Summer is one of the most volatile periods for natural gas with the combination of heat waves, hurricanes and potential weather pattern shifts such as La Nina. During the summer months, a 50% move in the price of natural gas is not uncommon. Another 50% rise by the end of the summer would put it around $4. And four bucks is near the midpoint of the $6.50-$1.65 range of the past three years.
Billionaire investor David Einhorn has also perked up to the bull scenario in nat gas. In his most recent investor letter his big macro trade this year is long natural gas. Here’s what he had to say: “Natural gas prices are not high enough to justify drilling in all but the very best locations. The industry has responded by dramatically reducing drilling activity. As existing wells deplete, supplies should fall. The high cost of liquefying and transporting natural gas limits competition to North American sources. Current inventories are high following a period of over-drilling and a record warm winter. However, the excess inventory is only a couple percent of annual production, which has already begun to decline. Normal weather combined with lower production could lead to a shortage within a year.”
This all contributes to the bullish action we’re seeing across commodities, led by the bounceback in oil. The surviving companies of the energy price bust have been staging big comebacks, but could have a lot further to go on a run up in nat gas prices.
In the 1960s I ran a supply ship for Global Marine all over the Gulf of Mexico. Oil leases in those days were auctioned off by Minerals Management Service, a division of the Dept of Commerce.
The crooked going's on in those days would shock a bank robber. Everybody was corrupt. The oil industry owned everyone working for MMS. If you got caught cheating for the oil industry and got fired, you stepped into a better better job working for the oil industry. That was guaranteed. Payoffs and lies, and crooked deals were standard procedure.
The same is still going on today, only the names have changed.
You can not trust any government agency report or anything else. Corruption in the oil and gas business is everywhere.
Here's something I just read from EIA. They said:
"Natural gas production is expected to rise slightly for the rest of 2016 due to lower natural gas prices and fewer rigs. Rising natural gas production will add to natural gas inventories. High natural gas production over the long term will limit the upside potential for natural gas prices."
Bottomline here is that fewer rigs and lower gas prices will cause production to rise while higher natural gas production will limit the upside potential for natural gas prices. Does that make sense?
This is the EIA reporting on the gas markets. I can hardly write this for laughing so hard. Some really smart gas men here! Ha ha ha ha
wormwood, I now hold a HUGE position in CHK. I sold out at $4.65 a week ago, and now I'm averaged back in with the same number of shares at $4.45 and I happy as I can be.
I would not be surprised to see it dip even to $4 but then again, I would not be surprised to see it move back up to $5.
I'd buy all I could buy and hold on.
~15 million shares in 1 1/2 hours... 15 million weak hands removed! Very good! High volume and rising prices tells you that the stock is being accumulated by long term players that will not sell out on a whim. This is really a good day considering oil has been down all morning and just turned green! Brent crude is up about $50.60 and WTI is also headed up along with natgas being up 5.6 points.
Considering all the happened lately, this is really a great day for CHK!
PDS moving back up.
If you study the weather you see that southern Canada with have one of the coldest winters of record. Natgas demand will got to the moon and so will drilling demand. PDS has the most modern natgas drilling fleet in North American. They can drill the long laterals that frackers want now. Their rigs will be in high demand and fetch top day rates near $40,000 day. This will be PDS,s best year ever. This is a double in 6 months!
I have followed this stock for years. They've worked hard but never really had the modern fleet they needed. Now they do and everything is coming together for this company.
The will soon have a 6 month backlog!
I like to see high volume. CHK has traded 7.3 million shares in the first 30 minutes. This is 7.3 million weak hands we have replaced with new buyers who have a fresh long term outlook with CHK. I think we will see volume stay up all day today and get rid of lots of weak sellers. The less sellers around, the quickier the price will get back to $6 and on up. Natgas is up 2.03% at $2.6080. This is fantastic for June, especially considering that July, August, and September are predicted to give us record-breaking heat.
grilfriend, you are on the right track. PDS will do great this year. I followed them for years and almost give up of them. But I see they switched their tactics and model themselves after Helmerich & Payne, Inc. They got a real update fleet and top reputation. They can drill many long laterals that produce the most oil and gas per well. Also, Canada will be freezing cold next winter and gas demand will got the moon. They are the largest driller in Canada. They are in Mexico, and in the Middle East. Looks like a good long term play.
girlfriend, I'm not so hot on CHK as I am on natgas and natgas drilling. I heavy in two stocks I believe both are turnarounds--Chesapeake and Precision Drilling.
Natgas has been so low so long that producers are going BK and no one has any money to drill new holes. And banks are backing off. A lot of DUCs were drill at cheap prices last year just to keep rigs working. This has happened many times in the past. These DUCs increase a company's loan value; most were drilled just so the company's could increase their loans value. My guess is that 50% of these DUCs will never be fracked and never produce enough gas to light a cigar.
Natgas is rising fast; up almost 6.6 cents today alone. Henry Hub futures for January 2017 are at $3.34... I think we will surely bust through this number and hit $5.00 simply because the DUCs are mostly worthless and producers have no money to hire the tier 1 rigs that can drill long laterals. There is a severe shortage of these rigs which is why I am heavy into PDS. Precision has remodeled their entire fleet with the latest equipments and are as modern as any rigs on the market. They are much bigger than the old PDS and have a good chance to hit $12 within a few months.
In other words, I believe natgas is gonna be red hot in 2016 and 2017. Exports to Mexico will be up 25% and LNG will also increase and demand will outstrip production. Chesapeake will return to the day of old and will hit $30 in 2 to 3 years if someone don't come along and buy them out is the next few months.
Good luck to you!
girlfriend read me carefully!
Chesapeake is loaded with day traders that trade the stock based on the price of oil. Why? I have no idea; I think it's simply because lots of day traders don't realize or care that Chesapeake is mainly a gas play. They are trading oil price movement only, not fundamentals. And, it is working for them. I also think a lot of this trading is done by computer algorithms simple because the stock prices moves with oil faster than one can blink an eye.
So, yes... CHK moves up and down on oil and ignores nat gas prices. The other day, gas shot up 6% and CHK drop 5% so go explain this? I give up. I blame management for not releasing lots of press releases to explain their business is 80% gas.
But in the long pull, it does not matter much to the share price. The dips allow long term investors to get a cheap position. Eventually, selling pressure will disappear and CHK will quit bouncing all over the place. SWN did the same thing for many months.
I would also advise CHK longs to stay inside because there is a bear raid going on now. Every evil manipulator is trying to beat CHK into the ground by writing nonsense. There is only one reason to do that and that is so they can grab a long position at a cheap price.
They know CHK investors are like Humpty Dumpty setting on a wall so they blast away trying to scare ole Humpty into a slip and fall.
In my 30+ years of trading stocks, I have never seen the market so manipulated as it is now! You can't believe anything your read and only 1/10th of what you see. I think Bloombergs and other manipulators are going to destroy stock trading. I getting sick and tired of all the fake fear being spread around.
Now we got to worry about the UK leaving the EU, but truth be known, whatever happens will not affect Chesapeake Energy in the least! It's just fodder for the doomsday bears!
no girlfriend. I said in the post that the "worse case scenario is that it takes Chesapeake 3 years to return to it old glory and $30 per share." In other words, $30 by mid-2019. My target is still $10 for January 2017
I've thought about Friday's big drop. I think traders were afraid the UK would exit the EU and this would bring markets down all over the world. This was my first thought, but after an hour or so I started to think the fear of such a scenario will actually boost US stocks. I see money flowing into the dollar, gold, and the US markets. I called a few friends in London and they said it was 51/49 in favor of staying in the EU if the EU would give some concessions on immigration. It seems the Brits are fed up will all the foreigner and so are the Germans.
England is overrun with people from Poland, Lithuania, Latvia, and Romania. In some parts of London, close to half the population are now Muslims, according to detailed analysis by the Office for National Statistics obtained by The Mail on Sunday. On current trends they will be the majority in those areas within a decade. Muslims are increasing rapidly all over England.
It's a tough call but I don't think it affect our stocks for more than a day or so.
rosemount, I see only one way that Chesapeake will not reach $10 by January 2017.
First, look at the latest 3-month forecast. It calls for hot temperatures over the entire US with exception to the middle of the country. Electric demand will be sky high and pull down gas storage to below normal.
http://www.cpc.ncep.noaa.gov/products/predictions/multi_season/13_seasonal_outlooks/color/page2.gif
The same holds true for October, november and December. These are usually the months when storage builds to get us through the winter heating season.
http://www.cpc.ncep.noaa.gov/products/predictions/long_range/seasonal.php?lead=5
The worry starts in January, February and March 2017. If the US is unseasonably warm, we might have a problem. This problem might be alleviated by exports to Canada. The northern jet stream will stay north and keep the northern US and Canada freezing cold with lots of deep piling snow, while the southern US will be mild. Another thing that will help the winter demand will be exports to Mexico and LNG exports to Asia. The new deeper Panama Canal will open by July and allow most nat gas tankers to take the short route to Asia, where the real LNG markets are. Asian countries do not have pipelines so they depend on LNG to fire electric power plants, cooking stoves, and outdoor grills. There is a huge market in Asia for LNG, including China is they stop burning coal as they promise. Fact is, China HAS TO STOP BURNING COAL. You can hardly see you hand in front of your face for all the smog and poison air. Everyone walks around with a gas mask. Chinese citizens are super pissed.
The forecast for winter is based on a La Nino arriving, Right now, this is a 50/50 chance. If it don't arrive, next winter will be bitter cold and gas demand will go to the moon.
Another plus for CHK investors is that drilling is dragging. It will take 90 days to get a strong drilling program up and going. It looks like oil will start drilling first. A shortage of nat gas is possible which run the price up to above $6 and maybe to $7.
I am also willing to bet that CHK will get some takeover bids and might get bought out for maybe $15 share by a major. Nat gas is the future and the big boys know it. Worse case scenario is that it takes Chesapeake 3 years to return to it old glory and $30 per share.
Positive!
Oil investors are buying contracts that will only pay out if crude rises well above $US100 a barrel over the next four years - a clear sign some believe today's bust is sowing the seeds of the next boom.
The options deals, which brokers said bear the hallmarks of trades made by hedge funds, appear to be based on the belief that current low prices will generate a supply crunch as oil companies cut billions of dollars in spending on developing fields. The International Energy Agency forecasts that non-OPEC supply will suffer its biggest decline in more than two decades this year.
Read more: http://www.smh.com.au/business/markets/how-far-can-oil-rally-options-investors-bet-on-surge-above-us100-20160611-gpgxo3.html#ixzz4BKPhCOAD
CHK longs....
Here's the shit we must put up with. Before you read it, you must realize that the data is a year old and highlights every negative at that time. You should also realize that the author leaves out every positive. This is simply a slam against Chesapeake Energy done to increase Motley fool's roster of paying fools. They are purposefully trying to attract idiot investors so they can sell them more dumb advice. They are far too stupid to attract intelligent investors so they have learned over the years to slant all their writing to attract idiots that they can manipulate. They are only out to make money for themselves. Lying about companies struggling on their way back up is easy and attractive to crooks and to idiots alike.
First off, you can not write a balanced analyst report without weighing the negative against the positives. The most positive Chesapeake info that was purposely omitted is that the stock is selling at a ridiculous low price that offsets all the negatives they have dreamed up. In other words, at current prices, the stock is well worth a little gamble simply because if Chesapeake pulls out of the jam, an investors can get a 1000% return on his money. That's right, $4,420.00 invested today could easily turn into $45,000.00 in 2 short years. A million could return $45 million. Now wouldn't that be nice.
Investing in stocks is gambling--we all know that. The successful investor picks the stock most likely to return huge profits. There is no better investment for returning huge profits than a stock that has been beat to hell already. If the company turns around and goes back to its old glory, you win big!
Written by Sean O'Reilly one of the Motley Fool's most prolific liars!
My nomination for an oil and gas stock that could prove toxic to investors' portfolios, Chesapeake Energy (NYSE:CHK), will likely not come as a surprise to many. The company has mountains of debt, is the second-largest producer of a commodity that until recently stood at multidecade lows (natural gas), and continues to sell assets at what may very well be a market bottom just to raise cash.
The problem with all of this, of course, is that if and when a sustainable turnaround in energy prices takes place, Chesapeake will be using that good fortune not to expand its bottom line, but to play catch-up and pay down debt. The company has $1.9 billion in debt coming due in 2017, with around $1 billion more coming due in each of the ensuing three years. True, the company has time and the likely means to contend with these maturities. Chesapeake recently convinced its credit facility lenders to maintain its $4 billion credit facility as is, sending shares and its own bond prices soaring. However, being granted survival should not be confused with being a great investment.
Chesapeake will likely survive the current oil and gas depression (thanks to its vast empire of monetizable assets). Unfortunately, its more efficient, lean, conservatively financed peers have been picking up assets and expanding their operations -- and will continue to. Downturns have the nasty habit of culling the herd: The strong get stronger, and the weak declare Chapter 11 or exist as ghosts. Chesapeake is a strong contender for the latter scenario.
Why else do you suppose ExxonMobil has seen its shares barely budge over the past two years? Everyone knows it will survive, nay, thrive. The same is not true of Chesapeake. With a debt-to-total capital ratio of 86.9% as of March 31, negative free cash flow in fiscal 2015 of over $2.5 billion, and mountains of debt coming due through the rest of the decade, Chesapeake Energy will likely prove toxic to portfolios, no matter what oil and gas prices do.
Here's a thought!
Everybody is worried that the if the UK moves out of the EU in 10 days that the stock markets will crash.
The idea just occurred to me that the US markets have nothing to worry about since US dollars will be a safe haven for money coming out of Europe. If I was in London, I'd buy US Dollars, US stocks, or precious metals so we could actually get a boost is our markets.
I don't see no worry about what happens in Europe.
Any Answers to this question?
Why is Chesapeake (an 80% gas producer) always trading on oil prices? Gas popped up 11 cents the other day (6%) and CHK dropped 7%. Gas is still up 4% on the week and still CHK is down 12%... what the heck is causing this? Is it because management is asleep at the wheel? Are investors crazy?
Anybody with any tiny idea please tells us about it. Having to depend on oil prices is the WORST thing about owning this gas producers.
On The other hand, Southwest Energy, a gas producers trades on gas prices.
Somebody help me figure this out, please.
PDS third best land driller in customer satisfaction!
http://oilpro.com/image/11884/?utm_source=DailyNewsletter&utm_medium=email&utm_campaign=newsletter&utm_term=2016-06-09&utm_content=Article_11_txt
I KNEW THIS ASS KICK WAS COMING.
I said so on June 7th when I dumped at $4.65 -- This is just the way it is in the oil business. Most of it is just pure manipulation.
There is nothing wrong fundamentally! No stock is dropping big on high volume. This is just one of those times when you grit your teeth and ride it out.
Chesapeake is the best investment on the entire stock exchange. The only problem is that it trades with oil prices. That's managements fault. They should send press release and make sure traders know this is a nat gas stock.
Just ignore the noise.
I'm going out by the pool and gets some sun. Piss on these stocks. They'll be back up higher than before in no time. Bet on it!
HERE's WHY THE GAS BOOM WILL COME!
The recently released EIA Annual Energy Outlook 2016 forecasts almost unlimited gas supply at low prices. This is a lie! U.S. shale gas production is declining because of low prices AND WILL CONTINUE TO DECLINE!
The financial performance of shale gas-weighted E&P companies in the first quarter of 2016 was a disaster. Chesapeake, the biggest shale gas producer in the US, had negative cash from operations. That means that oil and gas sales didn’t even cover operating costs. Other shale gas plays including Anadarko, Comstock and Petroquest also had negative cash from operations. Goodrich and Sandridge are in bankruptcy and Exco and Halcon will soon follow. Ultra, Forest, Quicksilver, Swift and Talisman went BK last year. On average, surviving companies out-spent cash flow by two-to-one both in 2015 and 2016 but many normally strong companies greatly increased negative cash flow this year.
In other words, gas prices below $3 cannot sustain producers so why is the EIA lying to us!
Shale gas is the principal support for all U.S. gas production since conventional gas is drying up. U.S. dry gas production has declined almost 1 Bcf per day since September 2015 largely because of low gas prices.
Henry Hub gas prices have fallen 120% over the last 2 years from more than $6/mmBtu in January 2014 to $2.56 today and prices have been below $3/mmBtu since early 2015. A similar gas-price decline occurred from June 2011 to April 2012. Then, dry gas production fell when prices dropped below $3/mmBtu.
$3 is well below the breakeven gas price for any operator in any play. Even in the Marcellus–the most commercially attractive shale gas play–breakeven prices are more than $3.
All plays have declined from their respective peaks except the Utica Shale. Marcellus production accounts for more than a third (-0.36 Bcf/d) of shale gas decline in 2016. There is certainly no shortage of supply in that play but low prices and related delays in pipeline commitments have taken their toll on production.
There are no longer any "tier 1" horizontal rigs drilling in the Barnett or Fayetteville. These plays were supposed to help provide the U.S. with 100 years of gas supply.
Gas prices must increase or there will be no one to produce it!
Lower gas production along with increased consumption and exports spell much higher gas prices later in 2016 and in 2017. On the other hand, the very latest estimates from EIA show that there will be no more storage capacity by October 2016. No more storage capacity will move prices to $1.00/mmBtu.
How can that be true?
Shale gas made sense in 2010 when real gas prices averaged almost $7/mmBtu. That was because there was a supply deficit as conventional production declined before shale gas supply increased to replace it.
Falling gas prices have exposed the BIG LIE. Production growth in the last few years was funded by debt. Capital in search of yield continued to flow and overproduction pushed prices $1.61 by the end of 2015. Gas producers had to produce to pay the interest on the debt, and they did not want anyone to know about it!
The wreckage was obvious in late 2014 but no one yelled the alarm. The disastrous 1Q16 financial data and falling production should have made it clear to everyone. The Barnett and Fayetteville plays that were supposed to last 100 years are dead at current prices. The Haynesville will probably follow soon enough. Capital is vanishing into thin air and so will production.
SOMEBODY LIED TO INVESTORS IN A BIG WAY! THE TRUTH IS ABOUT TO COME OUT! BOOM TIMES ARE JUST AROUND THE CORNER!