Chesapeake Makes Management Changes - Analyst Blog

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Natural gas provider, Chesapeake Energy Corp. ( CHK ) recently announced certain management changes to speed up its growth worldwide. The change includes the exit of four senior executives, including the 22-year veteran chief operating officer Steve Dixon.

Steve Dixon also served as the interim chief executive in Apr 2013 till he was replaced by outsider Doug Lawler in June. Lawler's earlier stint was with Anadarko Petroleum Corp. ( APC ).

The other three of the pack of four leaving includes top executives in drilling and production. They are senior vice president Steve Miller, executive vice president Jeff Fisher, and the company's head of human resources, Martha Burger.

Chesapeake's decent profits in the recently reported second quarter encourage us to see a growth potential in the company. However, the issue of high debt level still plagues its books.

Going forward, as the company shifts its focus to more liquid-rich plays, it expects natural gas production to fall approximately 7% in 2013, while liquids production is expected to increase approximately 27%.

Chesapeake expects 2013 total production in the band of 1,434-1,478 Bcfe. Natural gas is expected to contribute 1,080-1,100 Bcf to the total production. Oil production forecast is 38-40 million barrels/MMBbls, and NGL will likely be in the 21-23 MMBbls range.

During 2013, Chesapeake aims to spend approximately 86% of its total drilling and completion capex on liquids-rich plays. The company also plans to invest heavily in the development of its holdings in the Eagle Ford Shale, Granite Wash and Mississippi Lime.

Chesapeake Energy is an independent oil and gas company engaged in the development, exploration, acquisition and production of onshore natural gas and oil reserves. The company owns interests in producing oil and gas wells concentrated in three primary operating areas: the Mid-Continent region of Oklahoma, western Arkansas, southwestern Kansas and the Texas Panhandle; the Gulf Coast region; and the Helmet area of northeastern British Columbia. Chesapeake is the second largest U.S. natural gas producer after ExxonMobil Corporation ( XOM ).

The company currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months. However, there are other stocks in the oil and gas sector like Cabot Oil & Gas Corp. ( COG ) that carry a Zacks Rank #1 (Strong Buy) and is expected to outperform the equity market.




ANADARKO PETROL (APC): Free Stock Analysis Report

CHESAPEAKE ENGY (CHK): Free Stock Analysis Report

CABOT OIL & GAS (COG): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: APC , CHK , COG , XOM

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