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Keith Schaefer, publisher of The Oil & Gas Investments Bulletin, on Chesapeake Energy’s $4 billion pipeline sales announcement and shareholder r...
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-- I -- president energy announcing a four billion dollar pipeline sell.
As well -- is rejecting two directors at their annual meeting today but -- isn't up to boost the stock.
Still about 40%.
Over the last year he's sick -- -- -- -- mrs.
Bolton says no.
And he joins us now keep how come no interest time.
Petraeus yet I think -- a couple things that thing about here one of their.
The stock has had a lot of good news lately -- that we've had a good market week we've had a good rally and natural gas over the last month.
And of course Carl Icahn coming in he's got a great track record of creating value for companies.
So we've had three good pieces of news that I think are really going to be an island in a sea of bad news and in particular that's kind of industrywide.
Natural gas prices -- I don't have a lot of hope for them and when you add in a company that is gonna have to sell a lot of assets in a declining price environment.
I just don't see how that's gonna great long term value for shareholders and -- I'd be a seller.
OK so they just sold a four billion dollar pipeline to -- a potentially ten billion dollar hole.
A lot of it has to do with Aubrey McClendon is doesn't it -- mean.
This notion that -- exited the gas hedging contracts in late 2011 is probably an up to make shareholders want to scream right now.
Absolutely you know there -- unfortunately what they've had to do now cash flows have been really crimped because of that and what we're seeing now is is a continued downward pressure on prices and so they've had to sell these assets and and the midstream assets that they just sold here for four billion dollars in my mind was one of their best assets.
So there like the best call the midstream assets are the best call on cheap gas and that's gone now.
Right right if you -- the best of breed what do you have left.
You know I -- I think also too there are there's corporate governance issues right I mean -- the public domain and realize how intertwined.
The CEOs finances war with the company's actual finances do that.
It no I don't think so and I think.
Or.
What what's happening now is that.
-- -- -- has legacy to argue they have simply because the stock has come off so much and out of if there's no more bad news on the corporate governance side that might just be enough to give the stock a left.
But really in investors have -- thing about is this the type company where that the management and the board are gonna really represent your interest.
Right now that's -- little shaky and Carl -- gonna commend in and change that hopefully.
But again to do that there's a lot of work to be done in the networks got to get done in a declining price environment.
Yeah so which even short the stock at this point would you just stay away from it.
You know what I wouldn't short the stock right now for a couple reasons one is I think there's this gas rally could have another month left and it and be everytime we have some positive news like this with what with what as happened with these sales are what.
But Carl -- gonna do and aboard the stock is going to have a little pop a little bit of good news is gonna give this.
A 3050 cent -- -- maybe a little bit more you're gonna see that now and again.
Over the next few weeks until the real glut of natural gas just starts to watch out all these stocks pretty badly so I would just stay away from.
Keith Schaefer thanks for being honest about this keeps -- that oil and gas investments Bolton says stay away from this -- thank you sir.
Publisher.
We like that.
