Thursday, January 18, 2007

Link: Chesapeake Energy Analysis

I like Chesapeake Energy as a contrarian play. Over the last year, natural gas prices have declined from last year's peak to about $6 per mcf due to mild winters and cool summers. Even if it gets much colder in the next few months, the current glut of NG supply may still keep prices depressed. Lower NG prices is a short-term risk to what I think is a long-term trend. The company's multi-year reserve acquisition binge has ended and management will now be devoting their efforts to drilling. I expect reserves to increase dramatically as unproven reserves are proven. This will further boost the present value of the company as presented in Eric Schleien's excellent post about the break up value of the company. Even though CHK has 2x more unproven reserves than proven reserves, the unproven reserves are valued at 1/2 the value of the proven reserves. In other words, proven reserves are 4x more valuable than unproven reserves according to this analysis. The analysis appears very conservative because historically 50% of unproven reserves are converted. Coupled with the potential for NG prices to increase, we have a very undervalued asset play.

I have a position in this stock and will be purchasing more under $28. For a second opinion, check out this post at Theo Wong's site. Note that McClendon did not actually make the $9 million dollar purchase; it was a stock grant.

6 Comments:

Blogger oakleyses said...

coach purses, louis vuitton, louis vuitton outlet, ray ban sunglasses, michael kors outlet, coach outlet, michael kors outlet, oakley sunglasses cheap, kate spade outlet, prada handbags, oakley sunglasses, ray ban sunglasses, tiffany and co, chanel handbags, oakley sunglasses, louboutin, burberry outlet, polo ralph lauren outlet, michael kors outlet, michael kors outlet, tiffany and co, burberry outlet, nike free, coach outlet store online, gucci outlet, louis vuitton handbags, longchamp outlet, louis vuitton outlet stores, michael kors outlet, air max, polo ralph lauren outlet, louboutin outlet, true religion jeans, true religion jeans, kate spade handbags, longchamp handbags, tory burch outlet, jordan shoes, louis vuitton outlet, christian louboutin shoes, nike shoes, michael kors outlet, air max, coach factory outlet, prada outlet, longchamp handbags, louboutin

4:32 PM  
Blogger oakleyses said...

coach purses, louis vuitton, louis vuitton outlet, ray ban sunglasses, michael kors outlet, coach outlet, michael kors outlet, oakley sunglasses cheap, kate spade outlet, prada handbags, oakley sunglasses, ray ban sunglasses, tiffany and co, chanel handbags, oakley sunglasses, louboutin, burberry outlet, polo ralph lauren outlet, michael kors outlet, michael kors outlet, tiffany and co, burberry outlet, nike free, coach outlet store online, gucci outlet, louis vuitton handbags, longchamp outlet, louis vuitton outlet stores, michael kors outlet, air max, polo ralph lauren outlet, louboutin outlet, true religion jeans, true religion jeans, kate spade handbags, longchamp handbags, tory burch outlet, jordan shoes, louis vuitton outlet, christian louboutin shoes, nike shoes, michael kors outlet, air max, coach factory outlet, prada outlet, longchamp handbags, louboutin

4:38 PM  
Anonymous Anonymous said...

2015-9-28 xiaozhengm
michael kors outlet online
ugg boots on sale
Authentic Louis Vuitton Handbags Cheap Sale
Authentic Montblanc Pens Sale Online
ugg boots sale
uggs australia
fitflops
true religion jeans
Louis Vuitton Neverfull GM Monogram
coach outlet
Air Jordan 4 Green Glow
michael kors uk
coach factory outlet
toms outlet
Michael Kors Outlet Online USA Stores
burberry outlet
Designer Louis Vuitton Handbags Online
air max 95
Michael Kors outlet Sales Big Discount
cheap ugg boots
michael kors outlet
Louis Vuitton Backpack Purse
louis vuitton outlet stores
coach factory outlet
ugg boots
Kobe Basketball Shoes For Sale
Michael Kors Handbags Factory Outlet
Coach Outlet Store Online Official Website
ugg boots
Red Bottom Shoes Christian Louboutin
Coach Outlet USA Stores
Michael Kors Factory Outlet Online Official
Abercrombie Short T-Shirts
Coach Factory Outlet Online Authentic

7:20 PM  
Blogger Unknown said...

ninest123 12.28
tiffany jewelry, burberry, louboutin outlet, ray ban sunglasses, ray ban sunglasses, longchamp outlet, michael kors outlet, louis vuitton outlet, ugg boots, louis vuitton outlet, prada handbags, ray ban sunglasses, oakley sunglasses, nike free, louboutin, polo ralph lauren outlet, nike air max, ugg boots, oakley sunglasses, chanel handbags, nike air max, michael kors outlet, nike outlet, louis vuitton, prada outlet, longchamp outlet, longchamp, michael kors, louboutin shoes, gucci outlet, ugg boots, christian louboutin outlet, louis vuitton, louis vuitton, replica watches, oakley sunglasses, michael kors outlet, jordan shoes, uggs on sale, burberry outlet online, tiffany and co, cheap oakley sunglasses, michael kors outlet, tory burch outlet, ugg boots, polo ralph lauren outlet, replica watches, michael kors outlet, oakley sunglasses

8:53 PM  
Blogger Unknown said...

michael kors, hollister, coach purses, coach outlet, true religion jeans, north face, burberry, nike trainers, true religion jeans, ray ban uk, nike roshe, michael kors, vanessa bruno, ralph lauren pas cher, nike blazer, replica handbags, nike roshe run, ralph lauren uk, nike free, abercrombie and fitch, ray ban pas cher, lululemon, air jordan pas cher, true religion jeans, air force, lacoste pas cher, sac guess, hogan, tn pas cher, hermes, air max, michael kors, vans pas cher, nike free run uk, timberland, nike air max, new balance pas cher, hollister pas cher, nike huarache, converse pas cher, longchamp pas cher, nike air max, michael kors, nike air max, louboutin pas cher, oakley pas cher, north face, true religion outlet, sac longchamp, mulberry

8:56 PM  
Blogger Unknown said...

supra shoes, links of london, pandora charms, ugg,ugg australia,ugg italia, converse outlet, lancel, doke gabbana outlet, hollister, barbour jackets, moncler, louis vuitton, wedding dresses, louis vuitton, moncler, ugg,uggs,uggs canada, barbour, sac louis vuitton pas cher, moncler, thomas sabo, canada goose outlet, canada goose, pandora jewelry, ugg boots uk, moncler, canada goose, doudoune canada goose, marc jacobs, toms shoes, coach outlet, canada goose outlet, bottes ugg, canada goose, moncler outlet, louis vuitton, moncler, replica watches, moncler, canada goose uk, pandora jewelry, swarovski, juicy couture outlet, montre pas cher, canada goose, pandora charms, moncler, karen millen, ugg pas cher, swarovski crystal, louis vuitton, juicy couture outlet
ninest123 12.28

9:02 PM  

Post a Comment

<< Home