Replies to post #5261 on Chesapeake Energy Corp (CHK)

[girlfriend]

Yeah what a conundrum…..LOL. You confuse me!

[Crusen]

It's pretty simple. Ng is not worth what oil is...look at Q3, the most recent...Ng revenues are I forget now but not greater than 60%...but do they even make a profit at $2.51/off?

[researcher59]

Those percentages are on an "oil equivalent basis", not on a revenue or profit basis.

NG is much cheaper than oil on an energy equivalent basis because it's so plentiful.

The generally accepted ratio is 5.8 Mcf = 1 barrel of oil.

So at current prices, 5.8 x $3.70/mcf = $21.46.

Oil prices would have to drop to $21.46/bbl for energy equivalent cost of NG at $3.70/mcf.