Analysts are predicting that Chesapeake Energy and its stock price is poised for a bounce-back, if CEO Aubrey McClendon follows through on promises to sell certain company assets and reduce the company’s debt load. So says an article from Bloomberg BusinessWeek on Friday:
Now that the board of the Oklahoma City-based company has said it will remove Chief Executive Officer Aubrey McClendon from the chairman’s post and examine his personal transactions for any conflicts, analysts such as Bob Brackett at Sanford C. Bernstein & Co. said the focus is on how well the CEO follows through on promises to raise cash by selling assets in Texas, Oklahoma and Kansas. An incipient gas rally also portends well for a company whose output is 81 percent gas and that holds reserves vast enough to satisfy four years of U.S. household demand.
“Chesapeake is going to bounce back,” said Gianna Bern, president of Brookshire Advisory & Research Inc. in Chicago, who owns shares of Chesapeake’s publicly traded pipeline business, Chesapeake Midstream Partners LP. “There is no substitute for good geology and Chesapeake has leading positions in many of the richest American shale plays.”*
Read the rest of the article, and the reasons why many analysts think Chespeake is not down and out even in light of recent revelations of high indebtedness by McClendon and McClendon’s private hedge fund, by clicking below.
*Bloomberg BusinessWeek (May 4, 2012) – Chesapeake Seen Offering Biggest Gain in U.S. Shale Boom: Energy