Tuesday, April 8, 2014

Not Much Value in the Chesapeake Energy Spinoff


With a high debt load, it is understandable that Chesapeake Energy (NYSE: CHK  ) is cutting back on spending and spinning off some of its assets. Unfortunately, the combination doesn't necessarily portend well for a separated subsidiary that depends on the previous parent for a substantial portion of its revenue.

Chesapeake Energy spent the last several years struggling with a superior asset base of leading acreage positions in most of the primary shale areas. The company's stock continues to struggle due to expenses and the high debt load that is now causing it to cut capital spending at a time of low natural gas inventories.

Read the full article here.


Disclosure: Long CHES. Please review the disclaimer page for more details. 



No comments: