Chesapeake Energy Corp (CHK)

[LouisDesyjr]

God Bless the muppets

I am sure CHK will go higher today, there is no shortage of people that have no idea what the financials are like or what to realistically expect in tomorrows earnings release.

Oil is in the $30s, and the muppets are all excited that somehow everything is going to be all right, even as the company prepares to pay off debt by borrowing against other debt. (March 2016 bonds paid off with bank credit line, if the bank allows it. As a point of reference, I can't beleive the bank is idiotic enought to allow this or that some bank regulator would not get involved and tell the bank they wouldn't allow it. zerogedge recently ran a story that some banks were trying to sell off thier exposure on some credit lines and having to take discounts to get it sold, meaning no one expects the credit line will ever get paid in full)

I just took a look at a two year chart for oil. CHK lost all kinds of money in 2015 and oil was a high as $60, so oil prices need to be higher than $60 in order for CHK to have a chance at break even but we have the retail market piling in because they think everything is ok now. On top of that, most of CHK is NG, which is in a multiyear oversupply, and with going into the spring season, will have more pressure put on prices.

In spite of all of this, I expect the muppets will continue to pile in since they seem to be buying into anything oil related.

Louis J. Desy Jr.