chesapeake energy sig commodities thomas olsen nicolas martinez dan gennarelli
TRANSCRIPT
Chesapeake Energy
SIG CommoditiesThomas OlsenNicolas MartinezDan Gennarelli
Chesapeake Energy Snapshot
Primarily a natural gas (NG) producer Largest Independent NG producer in
America Focusing on developing less risky on-
shore wells rather than Gulf of Mexico
Performance Metrics - CHK
Current price – $45.24 P/E (Trailing) – N/A P/E (Forecast) 12.2 PEG - Negative Market Cap – 28B Reserves of 12.17 trillion cubic feet per
natural gas equivalent Debt to Equity Ratio - 1
Earning Reports
Last 2 Years Profit 2007 - $4,881,000,000 2006 - $5,069,000,000
Last 2 Quarters Profit 6/08 - ($794,000,000) 3/08 - ($1,300,000,000)
Outperform
CHK Dialy 3 month
CHK Monthly 5 year
NG V8 Weekly
CHK vs. NG V8
Recent Trends
Natural Gas prices have fallen precipitously this summer
Still trade at about 40% discount to Oil BTU-wise
Production and pipeline capacity coming online in the rockiesGood for consumersBad for producers
Pickens Plan
Recent big push for compressed natural gas to replace gasoline for transportation
22% of municipal buses use CNG Truck companies are beginning to switch Will cars follow suit? Short-term bearish Long-term bullish?? Long dated call options once vol goes down?