Natural gas provider,
Chesapeake Energy Corp.
) 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
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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.
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
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
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.
) that carry a Zacks Rank #1 (Strong Buy) and is expected to
outperform the equity market.