Out Fox The $treet

 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.

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. 

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...

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. 

With the surprise retiring of Chesapeake ( CHK ) CEO Aubrey McClendon a few weeks back, will investors benefit from the company shifting towards a more disciplined strategy? Or will the company remain on the same collision course with debtors? The company is the second-largest producer of natural gas, a top 15 producer of oil and natural gas liquids, and the most active driller of new wells in the United States. The company's operations are focused on discovering and developing unconventional natural gas and oil fields onshore with leading positions in the Eagle Ford, Utica, Granite Wash, and Mississippi Lime unconventional liquids plays and in the Marcellus, Haynesville, and Barnett unconventional natural gas shale plays. While most investors don't doubt that Chesapeake owns the largest domestic oil and natural gas resource base, the question exists as to whether shareholders will reap the value of those resources due to a huge debt load. Read the full...

After the close on Monday, Chesapeake Energy (CHK) filed for an IPO of its oilfield services division. Based on initial review of the S-1, Chesapeake Oilfield Services (COS) should be avoided at best if not shorted. Naturally this will highly depend on the ultimate valuation place on the stock once it prices and starts trading. Chesapeake intends to raise $862M in a much announced IPO of the oilfield services division that performs a big portion of the work for Chesapeake itself. The interesting part is that the sector is under pressure so a lot of investors will see this as a desperate move. Industry leader Haliburton (HAL) is around 52 week lows and last year's fracing IPO C&J Energy Services (CJES) trades near lows as well. Additionally, Chesapeake has made it clear that it needs to raise cash so most contrarian investors might think that such an IPO might be priced to sell. Unfortunately, the funds to be raised and the past comments from the company don't sugges...

Interesting chart from the EIA on natural gas storage back to 1994 based on the end of March totals. March is the period when inventories normally hit the lowest level after a draw down from winter heating. Naturally since production is down and the winter was one of the warmest on record, inventories have soared. Figure - Working Natural Gas in Storage, End of March Inventories Source - EIA The real question will be whether producers such as Chesapeake Energy (CHK ) have cut back enough on production to reduce supply. If not, prices will continue going lower and storage will max out over summer. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Interesting article from the Financial Times about a subject I've wondered about as well. Will the surge in land prices for US shale oilfields last? Every time you read an article, one wonders why Chesapeake Energy (CHK) can't translate purchases of acres at $1,400 that is sold for $15,000 into huge stock price gains. Also, it amazes me that none of the major energy companies with vast cash hoards aren't able to beat CHK to the punch for cheap acres. Ultimately the issue with Chesapeake is that it requires a ton of debt to grab all this land and hold onto it until it is able to drill and recover oil or nat gas. The big surge in nat gas production from these shale plays have already led to a price collapse in the domestic market. The recent expansion into oil plays isn't likely to cause the same collapse in price as oil is an international market. If nat gas was an international market as well, prices wouldn't have collapsed. Asian and European users pay doubl...

As most investors know, Natural Gas prices have been severely depressed due to the dramatic increase in supply over the last several years. All at a time that demand has stalled due to the Great Recession. Not to mention that Nat Gas is a domestic play as the US doesn't have the capabilities to export LNG. This is the major reason that Stone Fox Capital has heavily invested in copper and met coal stocks instead of the gasey variety. Those other commodities are greatly benefiting from the demand surge from China, India, and the emerging world. Nat Gas has been completely shut out of that opportunity.  At least until now if Shawn Hackett of Hackett Financial Advisors is correct. Hackett in a Minyanville.com article makes the case for a parabolic move in nat gas due to the tetonic shift of nat gas to a global pricing mechanism. According to him the US will be able to export natural gas in the next 12 months though I had previously thought it wouldn't be until at least 2015 befor...

As Nat Gas prices continue to plunge due to strong supplies from shale plays and low demand from industry, nat gas producers like Chesapeake (CHK) and now SandRidge Energy (SD) make bigger moves into oil drilling. To a major extent they are victims of their own success. The major success in shale drilling by the founders of CHK which now include the CEO of SD has led to much higher gas production even as demand lagged in 2009. Today SD announced the purchase of Arena Resources (ARD) which mainly focuses on oil production in the Permian Basin in Texas for $1.6B. This marks a major shift for SD into oil that the CEO claimed at a conference a few months back was '10x more profitable to drill for then gas'. Guess that should've signaled to the markets that SD was going to make such a move. Recently CHK announced that they were moving more drilling resources towards oil and away from nat gas. The April Investors Presentation shows a goal of 20% oil production and a probable dro...

Interesting to see Chesapeake Energy (CHK) drilling for more oil. The CEO has a great point that if they have a huge find in natural gas it will cause spot prices to decline, but if they hit it big in oil the spot prices won't be impacted. More signs of how their success in drilling has impacted the prices they sell the product since they haven't been able to provide for more outlets to absorb the additional production. Great point on coal, but it doesn't appear to be in the works. We're still a bigger bull on coal since its more of a global demand story then the domestic natural gas. Aubrey is a great interview as always: