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Wednesday, August 5, 2015

With Stock Falling, Chesapeake Energy Expected to Sell Off Assets or Sell Out Entirely

From Bloomberg:
Since taking over Chesapeake Energy Corp. in 2013, Doug Lawler has sold off gas fields, pipelines, buildings and drilling rigs, cutting net debt by $3.8 billion. 
For investors, it’s not enough. 
Some see the company as an acquisition target. Others suggest a last-ditch sale of an additional half-billion dollars in assets could help accelerate drilling in the Ohio and Texas shale fields where it may reap its biggest returns.

Since co-founder Aubrey McClendon was forced out by investors who targeted his debt dealings, the company’s market value has fallen by 58 percent. The debate comes as analysts expect Chesapeake will continue to lose money for another 18 months as depressed prices aggravate weighty pipeline commitments. 
Lawler is “dealing with a big hangover there,” said Christopher Geier, partner-in-charge of of Sikich LLP’s investment banking practice. “He has been untangling things and making it less and less complicated so that now the company looks to me like it’s ripe for a takeover.”
Read much more of what investors and analysts feel the company needs to do by clicking here.

It seems to be getting more and more likely that Chesapeake will end up getting acquired by another company.  How would this affect all of the many landowners in the Utica shale who have leases with the most prolific driller in the play?  We'll all just have to wait and see.

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