Chesapeake Energy Corp (CHK)

[ogbull]

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.