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why I think GE might make a bid for CHK:
https://powergen.gepower.com/products/heavy-duty-gas-turbines.html
NatGas demand is just a matter of time!
One trend which will positively impact the market is the regulations being enacted by governments worldwide. Concerns about increase in harmful CO2 emissions, and stricter regulations for climate change mitigation has increased the focus on technologies that can produce electric power in a much cleaner and efficient manner.
The key growth driver is the increasing efficiency and durability of nat gas turbines. The increasing efficiency of gas turbines is projected to drive their adoption for power generation applications. Stringent carbon emission regulations worldwide; focus on high performance and lower power generating cost; and volatility in fuel costs are driving demand for highly efficient gas turbines.
Lots of room for advancement and improvements. NatGas turbines will be generating 60% of the electric demand in 5 years. Coal and crude oil is dead and nuclear is being phased out. Solar and wind is 20 years away. They must be subsidized to break even. The established electric companies will not let them used their transmissions lines without paying a sharp fee.
Most oil and gas producers are in debt up to their eyeballs. Even the recent rise in oil and gas prices won’t be enough to repair the damage for many energy companies.
SandRidge Energy filed for bankruptcy with $4.1 billion in debt, the fifth energy company to file for bankruptcy in the past week. Since the start of 2015, over 50 oil and gas producers have gone bankrupt, and the situation is dire for hundreds more companies.
Banks have turned off the spigot. Many producers have no money or credit available to start a proper drilling program and ramp up production. Drilling is at a historical low.
Produces will pump all they can to pay the bills, but these wells will soon run dry. There will come a time soon when demand will outstrip production and prices will soar.
This slowdown is not like any slowdown I've ever been though and will not end like other slowdowns.
If the NatGas rig count don't quadruple within the next 2 months, NatGas will hit $4 MMBtu by November 2016 due to a drastic drop in storage and $5 MMBtu by January 2017. Prices have simply stayed too low for too long and producers have cut capex to the bone just to keep the lights on.
Chesapeake will soar because it has a guaranteed $4 billion line of credit to increase production. It can ramp up Marcellus to 2.5 billion cu feet per day in less than 90 days.
I see $10 by January 2017!
woops! January 2017!
I see buy signals everywhere all saying the week will be up as you suggest.
The daytime temperatures are turning up. Weather forecast calling for hot humid summers. Hurricanes are already hitting South Carolina. The GOM is next. Lots of soaking rain and floods all through Texas and Oklahoma will slow oil field activities and bring down production.
Heat will increase power demand. We might see $4 MMBtu by January 2017 if the summer pulls down storage and we have an average winter. Storage is the key. If we go into winter with low storage, we will be in great shape for the next two years.
Looking positive for oil and gas prices.
Lots of investors holding off on CHK hoping the price will dip before the start of Thursday's OPEC meeting. This might be a good idea and it might not because a lot of investors are waiting for the dip to get in.
I thought about it long and hard and decided to ride it out. If it dips, it will return back in a few days.
There's the good and the bad about Chesapeake. But after the beating the stock has taken, all the bad and then some has been priced in.
Audrey McClendon destroyed this company with his wheeling and dealing. Poor old Audrey is 10 toes up now so the worst is over.
Carl Icahn is now Chesapeakes major shareholder with 72 million shares and 2-3 seats on the board. The drop in oil, gas, and commodities have hit Icahn particularly hard, slamming his holdings in companies like Chesapeake Energy and Freeport McRoRan. But Icahn continues with his bets because he knows as I do that both companies will soon bounce back.
Price is not an issue with Icahn. He's worth 17 $billion and would dump Chesapeake in heart beat if he thought it was loser.
Carl is also a friend of Donald Trump. He bailed out Trump's Atlantic City’s Taj Mahal casino and is a strong supporter. He has Trump's respect.
Here's an interesting point: An investment fund run by Icahn has a net short position on the market; yet, he holds onto 72 million Chesapeake shares. He could and would sell or short Chesapeake if it made any sense.
On NatGas... June’s contract expired on Thursday at $1.963/mmBtu, a new one-month low. The new July contract pushed front-month prices back up to $2.169 per million British thermal units toward a four-month high as it has become the nearest-term contract. August is $2.28, September is $2.34, October is $2.44, November is $2.66, December is $2.96, and January 2017 is $3.09! This explains why my target price for January is $10.00 per share.
Of course, if gas goes up or down, then my target price will also move up and down.
Everything will hinge on how much supply is still in storage starting in December. If we get the hot summer that everyone is forecasting, then storage will drop like a heavy stone.
I do not believe that supply can keep up with demand because the drilling rigs needed to drill the long horizontal holes are in short supply. Drillers cut to the bone. They salvaged parts from stacked rigs and cut way back on maintenance. It's gonna take at least a year before enough rigs are available. Besides, few producers have any money to increase production and the banks are sour of extending credit. We could very easily see NatGas at $4 MMBtu in which case CHK will surely hit $10.
With record-breaking summer heat, Mexico's demand could be up 8%, and US demand up 15%. Humidity will be high due to La Nino and people will be roasting. La Nino will also move the southern Jet Stream north which will allow far more hurricanes to enter the GOM. This could disrupt production and show a spike in prices.
The new wide Panama Canal is scheduled to open in July. This will give LNG a boost because shipping cost to Asia will be cut by 40%. The LNG business is not going to disappear because contracts are already signed.
The OPEC meeting in Vienna on Thursday next will provide no support for those who hope the organisation will finalise the production freeze that Saudi Arabia rejected in Doha.
The Saudi policy under new energy minister Khalid Al Falih remains focused on increasing its share of the world oil market and leaving prices to free competition.
They are using their cheap oil to put US oil producers out of business because they think Muhammad gave them a 50% share of the US oil market.
Donald Trump says he wants US Energy to pay off the National Debt. How is that gonna happen if OPEC countries keep pumping their cheap oil like crazy?
Only one way... slap a 50% import tax on all OPEC oil. But Trump never mentioned any such tax. Why? Because if he did, OPEC would pour $billions into Crooked Hillary's campaign. She'd crawl in bed with Satin to get elected.
I believe the Saudi's crapped in their mess kit when they tried to put US oil producers out of business. I think the American public would support an 50% oil tax on OPEC oil and every other oil producing non-OPEC country would go along. OPEC would be DEAD!
The US needs energy independance! Vote for Donald Trump!
Every CHK Long should read:
Link
Bullish NatGas Article Link
This article agrees with all the points I been trying to make. NatGas demand will be up drastically this summer. La Nina is sure to come and bring needed rain and humidity to the US, which will make the summer miserable without air conditioning running on high. Production will not be able to keep up with demand and storage will drop slowly but surely and be low going into the heating season. $3.00 NatGas by January 2017 is a sure bet--$3.50 in likely. Henry Hub futures is showing $3.089 right now.
I see Chesapeake moving up to $6.50 by August 15 2016, and then to $10 by January 2017 if the weather predictions are even close.
El Nino is dead. La Nina is on the way. There seems little to worry about except the day the day fluctuations brought on by the day traders. I'm averaged in at $3.96 with more shares than I have ever owned of any one stock before. It's a huge bet for me, but I decided to stick with it regardless. I'm gonna win big or loss it all on Chesapeake Energy.
Donald Trump says he don't believe in Global Warming. That disappoints me, but it's not going to make any difference at the end of the day. CO2 in the upper atmosphere traps solar radiation and prevents it from escaping back into outer space. The oceans will warm and it will continue to slowly get hotter. If we don't switch to NatGas quickly, our oceans will heat up and storms will wreck the coastlines all over the world. The proof is everywhere. We are destroying Earth! Trump will have to change his position, which I'm sure he will.
Many are predicting that electric demand in the summer months will use more NatGas than the winter heating season. Sounds hard to believe but this is what I am reading. That is certainly true for Mexico, New Mexico, California, Nevada, Arizona, Texas, Louisiana, and Florida.
Hurricanes will also increase starting next month and this will shut down or slow gas production. All and all, NatGas demand will steadily increase. It is our only transition fuel until solar and wind get better established.
I don't think we will be able to keep up with demand unless drilling starts in a serious way very soon. But no one has got any money and banks aren't lending.
Oil demand will increase and I honestly believe that Trump will put an import tax on OPEC oil and level the playing field. OPEC is finished.
I'm staying on top of the news and the research but I'm backing off watching the stock tic by tic. I've got too many other project that are falling behind.
Audrey McClendon built this company on dirty dealing and then almost destroyed it. He's gone now and the turn around is underway. What's needed is to cut the budget to the bone and CEO Lawler is doing just that. I also believe very strong in Carl Icahn. He is one of the smartest investors around. He lost a lot of money this year, but so has a lot other big investors. This last 2 years have been difficult in oil and gas but things are turning around now.
Happy Trading!
radar, I agree. sellers are not too willing to sell below $4.15. Buyers offering $4.14 but not many sellers taking the bait. Looks like we are building a solid base here. I see CHK making a solid return to $4.35 early next week and then on to $5.00 by June 15th as long as oil and gas holds here, which I believe it will. I think by mid-July we will be pushing $6.
I checked the weather forecast. Lots of heat and humidity. Air conditioners will be running like crazy. Mexico imports will also skyrocket this summer due to heat and humidity. From what I'm reading summer demand could exceed winter demand.
I also see ~6 hurricanes hitting the GOM, disrupting gas supply.
I hope management don't make any more stock swaps until we get back to $10 at least, which I see happening in January 2016. In fact, I think the financial situation is under control all the way through 2017. By then, we should should be nearly $20.00 per share.
I'm relaxed now... going out for the rest of the day.
Happy Trading!
4.5 million shares in first 30 minutes. The more shares we trade, the more new players we get with longer holding plans. And the more disgruntled share holder we get rid of, the faster we move up to higher prices. We might have to trade in this ranger for a week before we move towards $5 pl
June also kicks off the summer driving season and the start of this years heat way.
Love the Volume! 2.5 million shares in 15 minutes. Who will burn our first? Buyers or sellers?
I might also add that Donald Trump promises that the US will be energy dependent under his presidency. This means that the OPEC threat is finished. If they start trying to take market share from the US by lowering price, Mr. Trump will slap a 30% import tax on all OPEC oil. Something that our stupid politicians should have done a long time ago.
OPEC is finished! All that remains is the funeral. That's why they want to sell Aramco shares on the US stock exchange. A foolish plan indeed.
The new Prince of Saudi Arabia has done non-repairable harm. Iran will wipe them out and no one will come to save them.
The Middle East can go the hell! American needs to get out of their business and stay out. No aide, no assistance, and no interference. And the Muslims can go back home and live with Isis where they belong.
I think North America needs to stick together, and give Mexico a little help keeping their criminals at home.
The EIA released a web page yesterday on natural gas demand. Below are the highlight I took from this page:
The annual U.S. consumption of natural gas is projected to rise 34 Trillion cubic feet by 2040. The industrial and electric power sectors make up 50% of the growth.
The current price of natural gas in a very low 1.92 per MMBtu (british thermal units). There is 1 MMBtu in one thousand cubic feet (1Mcf) of natural gas so the current price of natural gas is about 1.92 per 1,000 cubic feet.
Last year's revenue was $11.5 Billion, down 40% from 2014. Let's assume revenue growth returns to normal. Revenue will be 16.3 billion.
They owe ~$9 billion with 4 years to pay so they must pay back $2 billion per year including interest to be debt free in 4 years.
Do you think they can pay 11.2% of their gross Revenue for the next 4 years? If so, they will emerge debt free by 2020. This is why CEO Lawler is preaching about controlling expenses.
He has about 400 million allocated shares he can swap for debt or hang on to until share prices rises much higher. These shares are money in the bank! Suppose we get the $10 price target I,m preaching by January 2016 and Chesapeake sells the shares on the open market, the company will take in $4 billion and reduce debt by 50% in 6 months. It will dilute the shares but with debt cut is half, the price per share will rise far enough to offset any dilution.
There is also an additional safety net to support this! Chesapeake controls 8 million acres of undeveloped oil and gas property. This could be worth up to $25,000 per acre. Lets suppose it is worth only $2,500 per acre. The value of the land alone is more than the debt.
There are lots of variables.
The Henry Hub spot price averaged $2.62 for 1,000 cubic feet in 2015, the lowest annual average price since 1995. Let's suppose it bounces up to $3 and production rises as everyone expects. A little luck and Chesapeake share prices could hit $30 in 3-4 years.
The reason I see $10 by January 2016 is based solely on the way investors will view the future of the second largest natural gas producer in the US. What the hell, the share price was $15 only a year ago. $10 is not a lot of money to pay for the second largest gas producer in the the US when gas demand will soon skyrocket.
I also think that Chesapeake is a strong takeover candidate!
Think with your head... not you ass.
NatGas is back up and I said it would be! Nigeria is in big trouble and so is Venezuela. This should spike oil prices back up above $50. Look for an increase in CHK very soon!
http://seekingalpha.com/article/3978030-niger-delta-avengers-strike-oil-markets-daily?app=1&auth_param=1191vj:1bkea5e:afff4f7cb51d84405a4a59b01eff7776&uprof=44&dr=1
good move... my advice would be to jump back in now!
No... not a single share. There is only three reasons for today's drop and that is (1) taking profits from the recent run up. (2) day trading and (3) the weakness in natural gas prices. These are not fundamentals. Those that dumped will be sorry. New buyers with a fresh look forward will pile back in especially at these cheaper prices. Besides, this is normal for a beaten down stock that ran up so much the last two days. Every idiot on Wall Street is trying to beat it down so they can get into it cheap.
good, looks like the dip in CHK is due to day trading with mostly crude and natural gas. The gas dive is not deserved. The tiny drop is more to do with day trading than fundamentals. A lot of gas shorts should reverse themselves before the close.
I keep researching and finding nothing but positives starting in July. The weather experts expect the hottest humid summer on record. The evidence should start to be obvious in less than two weeks. Phoenix is already predicted to break 106 in 19 days. Natural gas demand will soar--producers will not be able to keep up with demand. Prices will rise 30 cents by July 1st.
what caught you by surprise? the rise or the fall or the volume?
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended May 20 rose by 71 billion cubic feet, compared to expectations for a gain of 68 billion.
That compares with a gain of 73 billion cubic feet in the prior week, an increase of 112 billion cubic feet in the same week a year earlier and a five-year average rise of around 97 billion cubic feet.
So the numbers are really a giant improvement.
This is the shoulder season in which natural gas demand falls to its lowest level. Shorts like to kick NatGas around during these seasons.
The weather does not agree with the dip. NASA is predicting the hottest summer of the last 100 years. Air condition demand will skyrocket as will Natgas used to generate electricity. This summer will be a roaster and maybe wake people up that global warming is indeed real.
Crude also fell 50 cents so there was a little temporary negativity. But crude is coming back up and NatGas will follow is an hour or so. Now is the time to buy if you want to get in.
This dip is a positive signal since we get to see the resolve of the current bunch of shares holders. If they are scared away easy, then that's good. They will not hold anyway. We need fresh blood with a long range outlook. Not nervous dingbats.
Just like most longs on this board a few days ago, most got cold feet and run out of the best investment of the year. They'll be sorry.
Just as I though, NatGas took a dive. I bought 10K on the dip simple because I think the market overreacted. It will drag CHK down for an hour of so. If you want in, now is the time to do it.!
10.8 million shares in first 30 minutes. Lots of weak hands selling out to the shorts for a quick profit. Its good to get rid of them. The sooner they are gone, the quicker we will see $10. I would sure like to see volume above 75 million shares.
Shorts Clearing Out!
The shorts are starting to run. It's too scary for them now. Maybe a takeover is starting to worry them?
Enjoy the ride!
CHK still has good upside potential! Maybe another 8% day.
When CHK mpves above $5.00, it will ramp up quickly to $6.50 because most brokers will not margin below $5 per share.
Yesterday's volume was 46,463,206 closing up 7.41% at $4.35 -- this was not the volume I hoped for but it was much above the 10 days average.
NatGas is down to $1.96 for two reasons: (a) I think the price is being run down on purpose by shorts hoping for a negative report today, and (b) because traders expects storage to climb because this is the lowest demand month of the year. The EIA will release the news today at $10:30 AM. I really don't what to expect this week. Be sure to keep you eye on NatGas prices. Some quick moves will likely occurred. My best "guess" is a quick dip down and return to $2.00. You might get a good buying opportunity at 10:31 but it will not last long. I wish I had some dry powder; I would buy UNG
But the ten-day weather forecast looks bullish. Lots of hot days. Phoenix has many days over 100 with one hitting 106.
https://weather.com/maps/tendayforecast
girlfriend, Chesapeake is indeed an extremely likely takeover target. There are 3 companies that would love to grab it. Exxon is at the top of the list. They recently issued bonds worth $12 billion, which looks like they are about to go on a cash buying spree. Chesapeake would be their #1 target. Moreover, if Exxon funded the acquisition with cash, CHK liquidity issue would be wiped out resulting in a huge potential profit going forward, more then enough to pay off the bond holders. In other words, they could swing the deal and make a killing.
There was also an opportunity for Exxon to acquire Chesapeake by acquiring its debt. I think this is what put the pressure on Carl Icahn and other major share holders to authorize more shares and pay off some of the disgruntled bond holders. This makes much harder for a hostile takeover.
The only question is whether regulators would allow Exxon to control so much gas productions. Whatever happens, Exxon is certainly on the prowl. This is why they have cut the Capex--they want to buy production, not explore for it.
Anadarko is another possible bidder along with GE Oil and Gas, which would also love to buy production.
And, let's not forget this company has 8 million acres of land that covers their debt easily and provides them with additional value. Forget about natural gas production... look at the deal as a REIT and you immediately see much higher value. Then take into account that a lot of this real estate also has proven natural gas reserves that could bring substantial more value prices.
This is also a great deal for Chevron to be more competitive with Exxon.
Having Carl Icahn on their board helps a hell of a lot. In my opinion, Carl is looking for the right take-over deal. That his usual style anyway!
Either way, $10 price target by January 2017 is extremely likely.
Hell arrives first!
The Bible says hell is down below a few miles above the molten core of the Earth. The Bible also says this is where we will go. But our wise men misunderstood the Word of God. We will not go down; hell will come up to us. Our planet will get so hot that we will all slowly burn up. The only way we can escape is buy a ticket on a space ship for $500 billion per seat. If you're short of money you will be stuck here when hell arrives.
We can delay the arrival of hell if we phase out CO2-intensive coal and crude oil. We must shutdown dirty electric plants and switch to solar and wind. But solar and wind are decades away. In the meantime we can use natural gas with 50% less CO2 until solar and wind are ready to power the world.
The entire world knows this to be true.
There are 2,203 trillion cubic feet of natural gas in the US. We use about 24 trillion cubic feet per year so we have enough to last about 92 years.
Per KW hour, coal cost 12 cents, nuclear cost 10 cents, wind cost 8 cents, and NatGas in 6 cents. The government does not need to force fuel switching, it will come automatically.
_______________________
Carl Icahn owns 72 million shares of Chesapeake Energy. Is he stupid? Or is he smart?
Chesapeake controls 8 million acres of of oil and gas rights in the US. They are the second largest NatGas producer behind Exxon. Exxon sells for $90 per share and has $4.5 BILLION shares outstanding. Chesapeake sells for $4.35 per shares and has 673 million share outstanding with approval to issue up to a maximum of 1.5 billion.
Will your money multiply faster in Exxon or in Chesapeake? What are the odds that Exxon will double in the next year? What are the odds that Chesapeake Will double? Keep in mind that for every share you buy in Exxon, you can buy 20 in Chesapeake and there is 3 BILLION less shares of Chesapeake as there is in Exxon.
Do see why Carl Icahn pick CHK? Do you see why NONE of the major investors is CHK are selling out?
It is not going take long for investors to see that Chesapeake is a $10 stock right now!
minkman... you are so correct.
In my opinion, Lawler traded shares for debt as a publicity issue to show that the company was willing to do anything to lower the expenses.
As time moves forward and the share prices reaches higher, the bond holders will get less stock. Time is on Lawler's side. This debt is not due now he is not going to give away dirt cheap shares. He will wait till share prices moves up much higher.
Chesapeake at these prices is indeed a gold mine.
girlfriend, surely you do not agree with the Barron's article. They teamed up with Barclays to cause the crash. Ignore our enemies.
girlfriend, I pounded the table until my fist were hurting. Everything I said came true. Chesapeake is a turn-around story engineer by Carl Icahn. McClendon almost destroyed the company. Icahn put his people on the board and fired him. That's what Icahn is famous for... he buys beaten up companies, takes over control of the board, fires the idiots, and puts in people that can turn things around. The man is a genius. He'll make $10 billion on this deal. This is why NONE of the major share holders dumped out.
I kept telling you that we need to see volume. We will break 23 million shares in the first 2 hours and maybe hit 70 million by the end of the day. Volume confirms a change in trend. Volume confirms the price is headed back up. The major problems are solved. This is a $30 stock in normal times. To hit $10 by January 2017 will be a cake walk.
My God! Chesapeake controls 8 MILLION ACRES of oil and gas country. Buying all that acreage and then getting hit with the warmest winter in history almost put the company out of business. Icahn seen the potential and knew how to fix the company.
We are back in business. Investors will come just as soon as they wake up to what has happened.
I'm holding 80,000 shares. You will have pry them from dead hand because I am not about to sell.
My work is over. I'm gonna lay around the pool. I don't care about the prices. There's no need to worry!
You need to get back in on any dip. I researched the hell out of the NatGas market and Chesapeake. Carl Icahn is not stupid. He has 72 million shares and he has not blink an eye. Chesapeake is huge--the second largest gas producer in the US.
NatGas is the only fuel that can save us from Global Warming. We have to convert to this fuel quickly. Solar and wind are at least 2 decades away.
The shorts think NatGas will drop until we get into July. They are wrong. June will be the hottest June on record as will July, August, and September. Summer demand is catching up with winter demand. NatGas will hit $3.00 soon and maybe $4.00 by January 2017.
Producers are short of cash and can not borrow from the banks. NatGas demand will be back to 2008 levels.
Chesapeake's profits will soar. This is a long term play; not a short term. There will be volatility but no more than we've been through already.
Just get back in and ride the turn-around story to glory.
17 million traded in one hour! Volume has returned. The downward trend is broken. Chesapeake will slow work it way back to the $10, There will dips and quick runs and all the other action that goes with trading. But this stock will ease back to $10 in less than 3 months. Load up and enjoy the ride.
Looks like a lot of buyers that got in cheap are taking profits form the millions of shorts. No problem. Chesapeake is headed back to $10 by July when you can fry eggs on the hood of your car. Natural gas is headed to $4.00 by year's end and maybe even higher. CHK is $10 by Christmas 2016 and $30 by Christmas 2017. I can wait.
12.5 million shares first in 30 minutes. This is the volume signal I been looking for-- the downtrend has been broken. Chesapeake Energy will work it way back to $10 is less that 90 days.
Could hit 500K in pre-market. Get ready for the squeeze.
CHK has 8 million acres to explore and develop oil and gas wells. I say that again---
EIGHT MILLION ACRES OF PRIME OIL AND GAS COUNTRY!
If they don't blow your mind, you are not an investor!
http://blogs.barrons.com/stockstowatchtoday/2016/05/24/chesapeake-energy-every-little-bit-helps/?mod=yahoobarrons&ru=yahoo
$4.24 (4.69%) in pre-market, volume 200K and rising quickly. We could get the squeeze.
Expect some surprises. Shorts might start selling heavy into the open to run prices down and weakened you will to hold tight. Don't fall for it. Hold tight until you see the volume go insanely up. Rising prices, fast trades and high volume happens when the shorts start fighting each other for the available shares. Pick you own time to sell. I might not sell at all.
NatGas is taking a beating by the shorts, but it will reverse itself very soon and head north back to $2.12.
We are setting on the winner of the year. Play it for all its worth.
Shorts not getting a lot of share bought in premarket. Buyers holding for higher prices. Today could be better than yesterday.
But make your own trade don't follow mu advise.
CHEAP SHALE GAS ENDING SOON!
Have any doubts? READ THIS:
http://finance.yahoo.com/news/why-cheap-shale-gas-end-214500806.html
Big squeeze underway!
Pre-market now $4.23 bid ask $4.25. I don't sell. I think we hit $4.50 at least today. Could run us to $6.50 or maybe $7.
I looked at the short said yesterday and there were no shorts, but this was a computer clinch. The short side is 132 million shares. That will take 4 days to clear at normal volume.
Both oil and gas up. BIG DAY TODAY. DON"T SELL TOO CHEAP.