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EnvestorFirst (< 20)

Chesapeake's Nat Gas Focus to Pop Stock



August 01, 2011 – Comments (1) | RELATED TICKERS: CHK

Chesapeake had decided to focus much of their efforts on natural gas this year. They have strong holdings in the shale plays and are utilizing natural gas in a very smart way. With natural gas prices starting to look promising, Chesapeake’s utilization of it could really pay off. The Trefis Team is predicting CHK to reach $36, and here is why.


Chesapeake Explores Alternatives to Power Rigs

Most of the drilling rigs owned by oil and gas producers are powered by diesel since access to electricity is expensive and at times impossible if the rigs are located in remote areas. Chesapeake is looking at natural gas as a potential energy source to fuel its rigs to counter rising fuel costs. In one such project, the company has found an innovative method to significantly increase the life of the standard lead-acid batteries. (SeeChesapeake Adding Natural Gas and Alternatives to Power Rigs)

Investments in New Technologies

Chesapeake is planning to invest $1 billion over the next decade in technologies that will spur demand for natural gas. The company currently has 6 major shale plays – Barnett, Haynesville, Bossier, Fayetteville, Marcellus, and the Eagle Ford. It plans to increase domestic onshore oil and natural gas liquids production by up to 50% with greater use of horizontal drilling and hydraulic fracturing. [1] This should give a significant boost to Chesapeake’s natural gas production volume as well as prices. As part of the $1 billion investment, Chesapeake is investing $305 million in two companies: one plans to build liquefied natural gas fueling stations at truck stops, and another plans to build a refinery to produce fuel from farm crop."

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1 Comments – Post Your Own

#1) On August 01, 2011 at 3:02 PM, mm5525 (< 20) wrote:

Buy CHKM, the MLP of CHK who takes mistream from CHK and Total. Great, increasing yield, and less E&P exposure than CHK outright.  Nat gas is the future of this country. Foreign entities have figured that out, but not so much the US of A. Eventually, even our brain-dead politicians will figure out increased nat. gas production is the quickest way to increase GDP and jobs in the USA.

Also consider EP, who finally got approval for the Ruby pipeline in the Western US, and their MLP, EPB. EP, all by itself, will eventually split into the E&P company and the pipelines, all by the end of the year, and the drop-down assets go to EPB.


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