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Chesapeake Energy Corporation Valuation Report, Q3 2010 - Strategic and Operational Analysis Product Image

Chesapeake Energy Corporation Valuation Report, Q3 2010 - Strategic and Operational Analysis

  • Published: July 2010
  • 120 Pages
  • GlobalData

Chesapeake Energy Corporation Valuation Report, July 2010 - Strategic and Operational Analysis

Summary

Chesapeake Energy Corporation (Chesapeake) is an integrated oil and gas company. The company, through its subsidiaries, is engaged in the acquisition, development, exploration, production and marketing of oil and natural gas in the US. The company is one of the largest producers of natural gas in North America and is also the most active driller of new wells in the US. Chesapeake primarily operates in the “Big 6” natural gas and oil plays including the Barnett Shale in the Fort Worth Basin of north-central Texas, the Haynesville and Bossier Shales in the Ark-La-Tex area of northwestern Louisiana and East Texas, the Fayetteville Shale in the Arkoma Basin of central Arkansas, the Marcellus Shale in the northern Appalachian Basin of West Virginia, Pennsylvania and New York and the Eagleford Shale in south Texas.

Scope

- Investment Thesis: This section highlights the companies new ventures, liquidity issues, assets analysis, hedging, new projects details, capex funding, geographical results of oil and gas operations, and other related analysis.
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1
1.1 List of Tables
1.2 List of Figures
2 Chesapeake Energy Corporation, Company Overview
3 Chesapeake Energy Corporation, Watchlist For 2010
4 Chesapeake Energy Corporation, Investment Summary
4.1 Largest Player in US Natural Gas Shales; Emerging Player in Unconventional Liquid Plays
4.2 Creation of a More Balanced Portfolio
4.3 Financial Restructuring and Continued Success in Asset Monetization Transactions
4.4 Visible Future Growth in Production
4.5 Deep Inventory of Undeveloped Assets
5 Chesapeake Energy Corporation, SWOT Analysis
5.1 Strengths
5.1.1 One of the Largest Producers of Natural Gas in the US
5.1.2 High Quality Asset Base
5.1.3 Consistent Growth in Production
5.1.4 Excellent Hedging Performance
5.2 Weaknesses
5.2.1 Excessive Dependence on Natural Gas
5.2.2 Inability to Fund Growth Solely Through Internal Generation of Funds
5.3 Opportunities
5.3.1 Rising Proportion of Crude Oil and NGLs in Total Production
5.3.2 Huge Inventory Base
5.3.3 Creating Value through Joint Ventures
5.3.4 Financial Restructuring to Increase Shareholder Value and Achieve Investment Grade Rating
5.4 Threats
5.4.1 Inability in the Future to Fund Growth through Joint Ventures and Other Deals
6 Chesapeake Energy Corporation, Goals and Stategies
6.1 Increased Focus on Oil and Liquid Rich Areas
6.2 Financial Restructuring To Reduce Leverage and Fund Growth Program
6.3 Achieve Industry Leading Operational Growth Rates
6.4 Continued Monetization of Assets to Fund Growth and Restructuring
7 Chesapeake Energy Corporation, Production and Development Overview
7.1 Production and Development Profile
7.2 Reallocating Resources from Natural Gas Plays to Liquid-Rich Plays in the US
7.3 Increased Level of Activity in the Unconventional Liquid-Rich Plays to Increase the Proportion of Crude Oil and NGLs in Total Production
7.4 Costs Incurred
8 Chesapeake Energy Corporation, M&A Highlights
8.1 M&A Activity
8.2 Reserve Additions and Associated Costs
9 Chesapeake Energy Corporation, Midstream Updates
10 Chesapeake Energy Corporation, Outlook
11 Chesapeake Energy Corporation, Forecast Financial Statements
11.1 Income Statement (2007-2014)
11.2 Balance Sheet (2007-2014)
11.3 Cash Flow Statement (2007-2014)
11.4 Financial Ratios
12 Chesapeake Energy Corporation, Valuation
12.1 Net Asset Value
13 Chesapeake Energy Corporation, Peer Comparison
14 Chesapeake Energy Corporation, Key Risks
14.1 High Rate of Indebtedness Reduces Financial Flexibility
14.2 Total Production Highly Skewed Towards Natural Gas
14.3 Inability to Fund Capex to Replace Reserves
15 Chesapeake Energy Corporation, Detailed Financial and Operational Metrics
15.1 Results of Oil and Gas Operations Per BOE Produced, Q1, 2009 -Q1, 2010
15.1.1 Results of Oil and Gas Operations per BOE Growth Rates, Q1, 2009-Q1, 2010
15.2 Chesapeake Energy Corporation, Quarterly E&P Costs Trends
15.2.1 Upstream Capital Expenditure, Q1, 2009-Q1, 2010
15.3 Chesapeake Energy Corporation, Quarterly Production Trends
15.3.1 Total Crude Oil and Natural Gas Production Trend, Q1, 2009-Q1, 2010
15.3.2 Total Crude Oil and Natural Gas Production, By Country/Region, Q1, 2009-Q1, 2010
15.3.3 Total Crude Oil and Natural Gas Production Per Share, Q1, 2009-Q1, 2010
15.4 Chesapeake Energy Corporation Crude Oil Production
15.4.1 Total Crude Oil Production Trend, Q1, 2009-Q1, 2010
15.4.2 Crude Oil Production, By Country/Region, Q1, 2009-Q1, 2010
15.5 Chesapeake Energy Corporation Natural Gas Production
15.5.1 Total Natural Gas Production Trend, Q1, 2009-Q1, 2010
15.5.2 Natural Gas Production, By Country/Region, Q1, 2009-Q1, 2010
15.6 Chesapeake Energy Corporation, Production and Reserves Trends
15.6.1 Total Crude Oil and Natural Gas Production and Reserves Trend, 2004-09
15.6.2 Total Crude Oil and Natural Gas Production and Reserves By Country/Region, 2004-09
15.6.3 Total Crude Oil and Natural Gas Reserve Changes, 2004-09
15.7 Crude Oil/Liquids Production and Reserve
15.7.1 Crude Oil/Liquids Production and Reserve Trend, 2004-09
15.7.2 Crude Oil Production and Reserves By Country/Region, 2004-09
15.7.3 Crude Oil/Liquids Reserve Changes, 2004-09
15.8 Natural Gas Production and Reserve
15.8.1 Natural Gas Production and Reserve Trend, 2004-09
15.8.2 Natural Gas Production and Reserves, By Country/Region, 2004-09
15.8.3 Natural Gas Reserve Changes, 2004-09
15.9 Total Crude Oil and Natural Gas Reserves Life Index
15.9.1 Total Crude Oil and Natural Gas Reserves Life Index, 2004-09
15.9.2 Total Crude Oil and Natural Gas Reserves Life Index, By Country/Region, 2004-09
15.10 Chesapeake Energy Corporation, E&P Costs Trends
15.10.1 Upstream Capital Expenditure, 2004-09
15.10.2 Acquisition Costs By Country/Region, 2004-09
15.10.3 Exploration and Development Costs, By Country/Region, 2004-09
15.11 Oil and Gas Cost Per Boe, $/boe
15.11.1 Oil and Gas Cost Per Boe, $/boe, 2004-09
15.11.2 Oil and Gas Cost Per Boe, $/boe, By Country/Region, 2004-09
15.12 Chesapeake Energy Corporation, Reserve Replacement Ratio
15.12.1 Oil and Gas Production Replacement Ratio, 2004-09
15.12.2 Oil and Gas Production Replacement Ratio, By Country/Region, 2004-09
15.13 Chesapeake Energy Corporation, Results of Oil and Gas Operations Trend
15.13.1 Oil and Gas Revenue and Expenses, 2004-09
15.13.2 Oil and Gas Revenue and Expenses, By Country/Region, 2004-09
15.14 Oil and Gas Revenue and Expenses, Per Boe
15.14.1 Oil and Gas Revenue and Expenses, By Boe, 2004-09
15.14.2 Oil and Gas Revenue and Expenses Per Boe, By Country/Region, 2004-09
15.15 Oil and Gas Performance Metrics
15.16 Chesapeake Energy Corporation, Land Holdings and Well Data
15.16.1 Gross and Net Developed and Undeveloped Acreage, 2004-09
15.16.2 Gross and Net Developed and Undeveloped Acreage, By Country/Region, 2004-09
15.17 Well Statistics
15.17.1 Producible Oil and Gas Well, 2004-09
15.17.2 Producible Oil and Gas Well, By Country/Region, 2004-09
15.17.3 Exploration and Development Wells Drilled, 2004-09
15.17.4 Exploration and Development Wells Drilled, By Country/Region, 2004-09
15.17.5 Developed Reserves per Well, Oil (Mbbl per Well), Gas (MMcf per Well), Oil and Gas (Mboe per Well), 2004-09
15.17.6 Developed Reserves per Well, By Country/Region, 2004-09
16 Appendix
16.1 Methodology
16.1.1 Coverage
16.1.2 Secondary Research
16.1.3 Primary Research
16.2 Data Sources
16.2.1 Company Source
16.2.2 SEC/Other Regulatory Filings
16.2.3 Agency Reports
16.2.4 Other Sources
16.3 Expert Panel Validation
16.4 Definitions
16.5 Units of Measure
16.6 Other Abbreviations
16.7 About Us
16.8 Disclosure
16.9 Disclaimer

Chesapeake Energy Corporation Valuation Report, July 2010 - Strategic and Operational Analysis

Largest Player in US Natural Gas Shales; Emerging Player in Unconventional Liquid Plays

Chesapeake holds the largest acreage position in the Big 4 natural gas shales including the Haynesville Shale, Marcellus Shale, Barnett Shale and Fayetteville Shale and is one of the largest independent producers of natural gas in the US. The company owned almost 2.7 million net acres in the US natural gas shale plays at the end of Q1 2010. Chesapeake is the most active driller of new wells in the US and is responsible for one out of every eight gas wells being drilled in the US. The company was operating 95 rigs on its natural gas shale plays at the end of Q1 2010. Furthermore, the company plans to increase the number of rigs operating in its natural gas plays to 106 and 105 in 2010 and 2011 respectively.

Chesapeake is also in the process of accumulating industry leading leasehold positions in the US liquid rich resource plays. Chesapeake held almost two million net acres in US unconventional liquid plays at the end of Q1 2010. The company entered the Eagle Ford Shale in 2009 and had accumulated almost 400,000 net acres by the end of Q1 2010. Furthermore, the company plans to increase its position in the Eagle Ford Shale to about 500,000 net acres by the end of 2010. Chesapeake was operating 21 rigs on its liquid rich resource plays at the end of Q1 2010. The company plans to ramp up activity in its liquid-rich plays by employing an average of 13 rigs in the Granite Wash, six in the Permian Basin, five in the Anadarko Basin and four in the Eagleford Shale during 2010. Chesapeake also owns around 9.2 million net acres in other conventional and unconventional plays. These unconventional and conventional crude oil and natural gas acreages are expected to hold almost 15.8 Tcfe of proved reserves comprising 92% gas at the end of Q1 2010. Additionally, Chesapeake expects its acreages to hold almost 80.4 Tcfe of risked unproved resources and 195.4 Tcfe of unrisked unproved resources.

Chesapeake Energy Corporation

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