From analysts Tim Rezvan and Truman Hobbs of Sterne Agee:
May 2, 2013
CHESAPEAKE ENERGY CORP. (NYSE: CHK) RATING: UNDERPERFORM
Price Target: $20.00
Analysts: Tim Rezvan, CFA / Truman Hobbs
Expense Initiatives Improve Earnings Outlook, But Asset Sale Uncertainty and Gas Hedges Remain '13 Headwinds.
CHK continues to drive efficiencies with its drilling program, reporting strong 1Q results and providing bullish expense guidance. However, enthusiasm for incremental upside to 2013 CF (our new estimates suggest +$0.4B change to 2013 CF) should be measured, given a $4B funding gap in 2013 that remains half-filled. With a large sale of undeveloped leasehold in its best oil play necessary to avoid further leverage (net debt-to-TTM EBITDA of 3.3x), we reiterate our Underperform rating.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.