quotezoqa.blogg.se - Seeking alpha chk

But fossil fuel prices can surge tremendously in a very short time.

Of course, oil and natural gas prices are way below those levels now. As a result, one Seeking Alpha columnist estimated that the company can come close to breaking even at $50 per barrel oil prices and $2.22 per BTU natural gas prices. It also hedged 30% of its natural gas production at $2.76 per BTU. Hedging for CHK StockĪs of February, Chesapeake hedged 72% of its oil production at a fixed price of $59.59 per barrel. Here are the four reasons why I think that the company, by the proverbial skin of its teeth, could avoid a bankruptcy or restructuring that would wipe out its shareholders. Given extremely low oil prices, those asset sales may not be viable.īut I do believe that Chesapeake still has a 20%-30% chance to survive without pushing CHK stock to zero.

7 Cash-Rich Oil Stocks That Will Survive This Crisisįurther, as multiple other columnists on InvestorPlace have pointed out, Chesapeake owes a great deal of money and planned to rely on asset sales to finance most of its debt this year.

In fact, I think that the company is much more likely than not to take steps that cause its shares to be worthless.Īfter all, the company’s lead shareholder, Franklin Resources, is reportedly “taking steps to prepare for a potential debt restructuring or bankruptcy.” I’m sure that Franklin is well-aware of the company’s difficulties and is taking those steps for good reason.

In the wake of the plunge in oil prices, I’m much more bearish on CHK stock.