Oklahoma City-based energy company, Chesapeake Energy CHK, agreed to purchase the Dallas-based private energy producer, Chief Oil & Gas, and related properties in a $2.6-billion deal. The transaction is expected to boost Chesapeake’s presence in Pennsylvania’s Marcellus Basin and also reinforce its asset portfolio, apart from generating higher free cash flow and increasing its projected dividend payout.
Chesapeake, which only came out of bankruptcy last year as a result of the overall recovery of the sector as well as the commodity prices’ surge to multi-year highs, will pay $2 billion in cash and approximately 9.44 million in common shares. CHK is looking to finance the same by selling its Powder River Basin assets in Wyoming to Continental Resources Inc. for about $450 million in cash.
This acquisition, which is likely to close by March 31, 2022, is Chesapeake’s second multibillion-dollar deal in recent times after it acquired Plano-based Vine Energy for $2.2 billion last year.
Chesapeake Energy’s operations are focused on discovering and developing the diverse resource base of unconventional oil and natural gas assets onshore principally in the United States. CHK is headquartered in Oklahoma City.
Chesapeake currently has Zacks Rank #3 (Hold). Investors interested in the energy sector might look at the following companies that presently carry a better Zacks Rank. Murphy USA MUSA, Ranger Oil ROCC, and Schlumberger SLB each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is valued at around $5 billion. The Zacks Consensus Estimate for Murphy USA’s 2022 earnings per share has been revised 17.2% upward over the past 60 days from $9.45 to $11.08.
Murphy USA beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 20.9%. MUSA stock has rallied around 49.7% in a year.
Ranger Oil’s stock has increased 204.2% in a year. The Zacks Consensus Estimate for Ranger Oil’s 2022 earnings is projected at $9.02 per share, which is an increase of a massive 152.7% from the projected year-ago earnings of $3.57.
ROCC beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 25%.
The Zacks Consensus Estimate for Schlumberger’s 2022 earnings is projected at $1.98 per share, up about 54.7% from the projected year-ago earnings of $1.28 per share.
Schlumberger stock has gone up 71.7% in a year. SLB beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 7.8%.
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Chesapeake Energy Corporation (CHK): Free Stock Analysis Report
Schlumberger Limited (SLB): Free Stock Analysis Report
Murphy USA Inc. (MUSA): Free Stock Analysis Report
Ranger Oil Corporation (ROCC): Free Stock Analysis Report
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