Thursday, June 28, 2012

Chesapeake Energy to refine, focus, shed assets canteen management

Thursday, June 28, 2012
The land grab is over.

Chesapeake Energy Corp. managers and executives work to company Oklahoma City in a leaner company to form North America focuses on 10 key areas. You work most of all to sell, where is the company not the No. 1 or no. 2 tenants.

However, some analysts say that Chesapeake needs to narrow its focus.

"We move harvest from seven years of asset identification and acquisition now in a phase of the asset", McClendon said annual general meeting of the company earlier this month. "It is a completely different company investments in become."

Deep in debt and working feverishly, Chesapeake switch to oil and natural gas liquids from dry gas, management has more than $6.60 billion in asset sales this year and plans, announced by end of 2012 to a total $14 billion upsell opportunity.

The company has said that it plans to sell a further $7 billion in Active next year.

When the sales of assets are complete, Chesapeake expected on 10 of the 12 largest oil and natural gas plays in the continental United States. The company is no. 1 or no. 2 in each of its core pieces.

Seven of the 10 focus areas are rich in oil and natural gas.

"We have the payment for this company transition towards increasingly clear for all in our liquids output growth should be seen next year and in the coming years", McClendon said at a Conference in May.

Chesapeake produces 30,000 barrels a day of liquids at the end of 2009 and expects that to increase production by 250,000 barrels per day in 2015 said McClendon.

Oil and natural gas represented liquids 19 percent of the Chesapeake of the daily production in the first quarter of 2012, up from 13 percent in the first quarter.

The sales strategy has drawn praise from Wall Street analysts.

"Chesapeake is one of the strongest asset positions in the industry, but they have one of the largest financial statements," said Oppenheimer analyst Fadel Gheit. "The company is well rich, but cash poor."

While Gheit of Chesapeake supports effort to sell its canteen management assets, he said that the company should be to narrow its focus.

"I think that it is too many areas," he said. "You want to be a Jack of all trades and master of none." That's not Exxon OK, if you have very deep pockets such as Exxon, Chesapeake. Chesapeake has to live within its means. "What it if Chesapeake play in 10 has them but very strong burden of investment compared to for many, many years to come?"

The problem is faced with a situation similar to many homeowners, he said.

"If you live in a nice home, but your mortgage you goes back, what good is it to break," Gheit said. "Chesapeake has drawn the line." "You need to put in new priorities."

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