Monday, July 8, 2013

Investopedia: A New Era For Chesapeake Energy

Chesapeake Energy (NYSE:CHK) had a well-earned reputation as the riverboat gambler of the natural gas world. If there was a hint of meaningful natural gas in an area, you could usually count on Chesapeake to be among the those bringing out the biggest checkbook to gobble up acreage. The end result of that policy was a large reserve base, but also a stretched-out balance sheet and weak profitability as natural gas prices plunged.

Now the company starts a new period. A new CEO brings at least the hope of better capital allocation, while an aggressive divestiture program should help fill the funding gap. While I think Chesapeake's economic returns are going to be impacted for some time to come by the aggressiveness of past days, I do believe the shares may offer decent value today if you believe in the future of natural gas usage in the U.S.

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