Chesapeake Energy Corp (CHK)

[ogbull]

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.