Why is Chesapeake Energy Struggling More Than Other Oil and Gas Companies?
It has been a little over two years since Aubrey McClendon said farewell to Chesapeake Energy Corp. (NYSE: CHK), the company he co-founded and of which he was once chairman and CEO. Chesapeake’s stock closed at just over $19 a share on the day of the announcement, up 6%. On Friday, shares closed at just over $14 a share, a decline of 26%.
Without McClendon to blame any longer, Chesapeake is among the worst performers on the S&P 500 index so far in 2015, down 29%. Until the company reported fourth-quarter and full-year earnings in late February, shares were trading roughly in line with the S&P 500.
The big problem for Chesapeake, and every other oil and gas producer, has been the dramatic collapse in oil and gas prices. West Texas Intermediate (WTI) crude oil traded at around $55 a barrel at the beginning of the year and has now fallen to around $48 a barrel. Natural gas traded near $3 per million BTUs and has dropped to $2.65.
How bad is that? Chesapeake’s average realized price per barrel of crude in the fourth quarter was $76.40. Crude has not topped $57 a barrel so far this year.Read more by clicking here.
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