Out Fox The $treet

Aurora Cannabis announced plans for a 1:12 reverse stock split. Most research supports dire outcomes for most reverse stock splits. Not all splits are negative, though, providing potential upside on the stock after already falling on the news. Aurora Cannabis only trades at ~3x sales estimates now. With  Aurora Cannabis  (NYSE: ACB ) trading below $1, the market shouldn't be too surprised the company announced a reverse split of their stock. Historically, reverse splits are negatives for participating stocks, but the cannabis sector is a new space where the capital structure and regulatory restrictions are as much the issue for the company than any dire situation. My  investment thesis  still remains positive on the catalysts for Aurora Cannabis during 2020, while the stock will be volatile during this process. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Weak Q4 cash flows don't help the dividend coverage ratio and concerns about the ability of Williams supporting the dividend. The questions surrounding the business relationship with Chesapeake Energy was extensively discussed in the presentation and earnings call, yet the impact from a restructuring remains unknown. Too many questions remain regarding negative outcomes to owning Williams. Williams Companies' (NYSE: WMB )  quarterly results  brought some interesting points regarding Energy Transfer Equity (NYSE: ETE ) and Chesapeake Energy (NYSE: CHK ). The details didn't really provide a resolution to the  outstanding issues  highlighted in my last article.  Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

Williams finally issues Q3 dividend amount. The company hasn't answered the long-term questions surrounding the impact of the fee cuts. The stock remains difficult to own until more questions are resolved. As the market was closing for the week, Williams Cos. (NYSE: WMB ) left shareholders in the dark regarding the upcoming dividend and the strategic alternatives resolution. In Williams: Negative Implications Of Chesapeake Deal , the research highlighted some of the issues with the fee cuts from the Chesapeake Energy ( CK ) deal. Long after the market closed on Friday, the company and market news sources provided some more information. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Williams agrees to fee cuts for higher volumes from Chesapeake Energy. The auction process for the company remains in limbo placing the positive merger with Williams Partners and the promised higher dividends on hold. The uncertainty around Williams makes the stock difficult to own despite the collapsing price. In possibly a somewhat surprising move, Williams Cos. (NYSE: WMB ) subsidiary Williams Partners L.P. (NYSE: WPZ ) agreed to lower the gathering and processing costs for Chesapeake Energy (NYSE: CHK ) for higher future volumes. The move is rare for the MLP sector and has some troubling implications despite the signaling by Williams that the move is a win-win for both parties. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Summary Chesapeake Energy closes deal with Southwestern Energy to sell Southern Marcellus Shale assets providing a significant liquidity injection. Chesapeake surprises the market with the authorization of a large stock buyback. The brilliant moves to improve liquidity and reward shareholders can't overcome the weak commodity environment. Before the opening bell, Chesapeake Energy (NYSE: CHK ) announced that it had finalized the nearly $5 billion sale of Marcellus assets. Along with the deal completion, the Board of Directors authorized a $1 billion stock buyback plan.  Read the full article at Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

In the middle of another strong earnings report highlighted by explosive Marcellus growth, Southwestern Energy ( NYSE: SWN     ) detailed a troubling problem for the company and the industry as a whole. The company is a leading driller for natural gas in both the Fayetteville Shale in Arkansas and the prolific Marcellus Shale in Pennsylvania. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

With the spin-off from Chesapeake Energy ( NYSE: CHK     ) finally here, investors can start watching Seventy Seven Energy ( NYSE: SSE     ). The oilfield services firm has had limited publicity typical of spin-offs, providing the opportunity for an attractive valuation. One important thing investors need to understand about spin-offs is that the new companies typically come out in disarray. The parent company wouldn't typically perform the split up if it weren't for a desire to unload an underperforming unit, or at least one viewed as undervalued. In the case of Chesapeake Energy, the natural gas exploration and production firm was originally hoping to sell the company for several billion to help reduce debt at the corporate level. The spin-off was the last option. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

 Chesapeake Energy ( NYSE: CHK     ) is a prime example of a company that overspent in the past and is now forced to cut back spending during the market rebound. The worst part of it all is that the energy company is forced to unload assets that apparently aren't wanted by the market at favorable valuations.  In not much of a big surprise, Chesapeake Energy finished spinning off the oilfield services division to existing investors due to a lack of market appetite for the service firm faced with the reduced drilling spending of the parent. In addition, the company announced several other transactions to reduce leverage.  Read the full article here .   Disclosure: No positions mentioned. Please read the disclaimer page for more details.

Based on first-quarter earnings, the surge in natural gas prices cured a lot of the ailments hurting Chesapeake Energy ( NYSE: CHK     ) over the last couple of years. According to the company, it remains the second-largest producer of natural gas and now the tenth largest producer of oil and natural gas liquids. So while the shift to liquids continues to gather steam, the company remains solidly reliant on the price of natural gas to achieve outsized returns for shareholders. With the large valuations obtained by smaller natural gas focused producers Range Resources  ( NYSE: RRC     ) and Antero Resources  ( NYSE: AR     ) , it is clear that shifting away from natural gas isn't a requirement for success. Read the full article here . Disclosure: No positions mentioned. Please read disclaimer page for more details.

Despite prolific Marcellus shale wells detailed in the fourth-quarter earnings review, Cabot Oil & Gas ( NYSE: COG     ) made a recent decision to expand drilling assets in the Eagle Ford. The company continues to face infrastructure and price realization issues in the Marcellus that are impacting short-term investment decisions. In six short years, the company has already reached total production in the Marcellus shale of 1 trillion cubic feet on only 290 wells. Even more interesting, the company has 51 wells in various stages of reaching production, including waiting on pipelines and completions. Based on that data and recent Eagle Ford drilling results, maybe investors shouldn't be surprised by the move to add a rig and capital spending to oil production in that area. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Since its spinoff from Williams Companies ( NYSE: WMB     ) , WPX Energy ( NYSE: WPX     ) has struggled with low natural gas prices and weak production numbers. Surprising to some in the market, the company reported a large first-quarter profit that smashed low estimates even though the company didn't achieve any surprise production numbers. In fact, the production numbers beat forecasts while still showing year-over-year and sequential declines. The results for WPX Energy were solid based on factors beyond the company's control and show how the market is bigger than any management team. Despite the shift of capital spending to oil, WPX Energy still obtains nearly 80% of production from natural gas. Along with a company like Chesapeake Energy ( NYSE: CHK     ) , higher natural gas prices will solve most of the ailments that these companies have faced in the last couple of years. Read the full article here . Disclo...

The recent data points from the CEO of Cheniere Energy ( NYSEMKT: LNG     ) should catch the attention of all investors interested in the natural gas revolution ongoing in the U.S. For those not familiar with Cheniere Energy, the company is working toward exporting liquefied natural gas, or LNG, at the Sabine Pass Terminal in La. and the Corpus Christi Terminal in Tx. With Cheniere nearly doubling over the past year, one of the best ways to play the export boom are natural gas producers in the Haynesville shale in La. One such producer is Comstock Resources ( NYSE: CRK     ) , and naturally the largest landholder in that area is Chesapeake Energy ( NYSE: CHK     ). Read the full article here . Disclosure: No positions mentioned. Please review the full disclaimer page for more details. 

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. 

Over the last couple of years, Pioneer Natural Resources  ( NYSE: PXD     ) has quickly developed into an oil major with a massive reserve base in the Permian Basin. Unfortunately, the company has garnered a stock valuation that equally matches the potential for production growth. At $28 billion, the stock now trades for seven times expected 2014 revenue. After the divestiture of Alaska and Barnett shale assets, Pioneer Natural Resources is now focused on developing the Permian Basin and Eagle Ford Shale acreage with a net recoverable reserve potential of more than 10 billion barrels of oil equivalent. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

In reporting its fourth quarter results, Cabot Oil & Gas Corporation ( NYSE: COG     ) again confirmed the high quality of its assets, but the report also highlighted a lingering problem. Cabot continues to produce monster wells in the Marcellus shale, yet it can't get market prices due to infrastructure snags. Similar to other firms, Cabot is reducing the projected 2014 capital spending budget while improving performance. In addition, the company is holding back on further expanding the Marcellus drilling program to seven rigs due in part to lack of infrastructure forcing the company to curtail growth efforts. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

The recent surge in natural gas prices isn't benefiting investors in natural gas producer  Chesapeake Energy ( NYSE: CHK     ). The stock actually declined during the polar-vortex winter. Even though natural gas inventory levels have fallen below the lows of the last five years, the futures price for the fuel source used to generate electricity hasn't moved much. In essence, the market still isn't convinced that a long-term structural change has occurred in the natural gas market. Chesapeake Energy remains one of the largest natural gas producers despite a move to focus on greater oil production. The company projects approximately $5.4 billion in capital expenditures during 2014, which will be nearly completely funded via operating cash flow. Other energy producers including Halcon Resources ( NYSE: HK     ) and SandRidge Energy ( NYSE: SD     ) are encountering the same issues of capital efficiency not leading to stock gains. Read...

The prolonged cold snap in the U.S. has pushed natural gas prices toward multi-year highs around $4.40/btu. At the same time, most of the domestic exploration and production firms sit below the highs from back in 2011 when the S&P 500 was at considerably lower levels. The combination could present a buying opportunity for the domestic natural gas producers including Chesapeake Energy ( NYSE: CHK     ) , SandRidge Energy ( NYSE: SD     ) , and WPX Energy ( NYSE: WPX     ) to name a few that are intriguing.   Read the full article here . Disclosure: Long WPX. Please review the disclaimer page for more details. 

The huge gains by Freeport-McMoRan Copper & Gold ( NYSE: FCX     ) over the last few months probably caught a lot of investors off guard. The company is a premier natural resource company, with a global portfolio of copper and gold assets, and significant domestic oil and gas resources. Somehow, slumping commodity prices for copper and gold haven't crushed the stock. In addition, the purchase of energy assets (with debt) isn't holding down the stock. So what is pushing it higher? It was beaten during the early parts of 2013 due to a merger that took away the focus on copper production and byproducts. Ironically, the stock has done better than copper focused producer Southern Copper ( NYSE: SCCO     ). Looking at large energy producers such as Chesapeake Energy ( NYSE: CHK     ), you can see a shift in sentiment toward more complex energy producers that happen to be laden with debt. Read the full article here . Disclosure: No ...

On first thought, the announcement of the resignation of the CEO at SandRidge Energy (NYSE: SD ) appears nothing to get excited about. Even if the market can blame Tom Ward for the stock weakness over the last few years, losing the founder of the company can’t be a good thing. The interesting part of this news is that the market has another prime example to follow. Not only did more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

As natural gas prices soar this year, Chesapeake Energy ( CHK ) is likely the biggest beneficiary. The heavily indebted, asset rich firm will make out like a bandit if natural gas prices triple as Jeremy Grantham suggested earlier this month. As Chesapeake was its own worst enemy with an aggressive land acquisition and drilling plan over the last decade, the company might become its own best friend with a scaled back capital spending plan. After a decade of rapid growth, Chesapeake turned into the largest independent producer of natural gas and a leading landholder in the vast majority of the important shale areas. The company has a leasehold on 15M net acres and has a reserve base of nearly 20 Tcfe. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details.