Chesapeake Energy Corp (CHK)

[woodtiger]

This news about the government can be seen as a positive and a negative. That means CHK has literally stopped producing oil despite having futures hedges that allow them to sell oil at over $50 that expires before the end of this year. CHK I read does not break even on the oil till it hits the $40 range I read so not taking advantage of their hedges is a waste of money unless they used up all the hedges already. Not to mention that they could lose these leases in bankruptcy or even before that if extensions are not granted by the government if they don't start drilling and fracking on these government-owned properties soon. While the fracking rigs stay unused and dormant they are still required to pay the rent or leases on these properties. The cost of restarting operation on these rigs is very expensive. You can't just flip a switch and start drilling like starting a car. So I don't expect CHK to restart drilling on over 100 of these leases and the land they own till oil markets are stable at least at $60 a barrel level but that's just my humble opinion. Every time there is a modest or even decent rally it's a lower high followed by a new low so I'm not concerned and if it does skyrocket I will welcome it and add to my puts and sell calls. Either way, I'm in a good position regardless. These rallies never last more than a day in general or less because the smart money sells every rally or sell the calls or buy the puts which force the options market makers to hedge themselves with stock. Good trading to you all. So I see the glass as half empty but of course, you guys can be right and I could be wrong. But a lot of you though the 10K and 8K meant they were not filing for bankruptcy and their debt was being reduced from 3 billion to 2.3 billlion and thought that was good news when what that actually meant was their credit facility was reduced from 3 billion to 2.3 billing which triggered a downgrade of their bonds to super junk status of a "D" rating. I earned you you guys to understand what you're reading and do your due diligence and research. That was so laughable that some thought the 10K and 8K was good news. Good trading to you all.

https://finance.yahoo.com/news/trump-administration-allows-chesapeake-suspend-215031558.html