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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 7, 2013 09:44AM

I am wondering how SandRidge Energy compares with CHK from a valuation perspective. Major shareholders are TPG-Axon, Fairfax Financial, Riverstone Holdings, Carlyle Group and most likely Tom Ward is on his way out. Selling Jan 2015 $5 puts give premium in excess of $1.55. You either get assigned at ~$3.5 or make 19.5% per year return on at risk capital.

There is definite risk here but there is possibility of some catalysts in next few months and even a sale of the company is possible. Although I am not sure who would be eager to buy unless natural gas prices rise.



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
Stocks Discussed: CHK, NGL, UNG,
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Re Chesapeake Energy Ready to Rise
Posted by: trinathdasari666 (IP Logged)
Date: June 7, 2013 05:02PM

Thanks Mritik. Agree with Kartikey. Great piece!



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 7, 2013 09:15PM

Hi Trinathdasari666,
Thanks for reviewing the article.



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
Stocks Discussed: CHK, NGL, UNG,
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Re Chesapeake Energy Ready to Rise
Posted by: vgm (IP Logged)
Date: June 8, 2013 05:15PM

"I am wondering how SandRidge Energy compares with CHK from a valuation perspective."

There's so much negative sentiment around SD that I'd be willing to bet it's significantly undervalued.

Prem Watsa's ownership has always puzzled me, since, from the outside, Ward's behavior seems reprehensible (a la McClendon - Ward and McClendon were at CHK together). It's not like Carl Icahn taking a chunk of CHK to go in as an activist to fix governance. On the contrary - Watsa stated at the recent Fairfax annual that he has complete faith in Ward and that Fairfax would be keen to own any other company that Ward might lead.

Have you looked at Exco? It also has been beaten down and has an impressive cadre of major shareholders - including Wilbur Ross, Howard Marks, Prem Watsa and Chuck Akre. It currently trades just above $8. Wilbur's cost basis is well above that. In 2011 there was an attempted but thwarted management buyout around $21. Like CHK and SD, XCO is suffering from low nat gas pricing.



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 10, 2013 10:08AM

Hi Vgm,
Thanks for sharing your thoughts, I very much appreciate it.

My take is that Watsa is investing in Natural Gas with more of a longer term horizon like 10 years. I too am surprised by his praise of Tom Ward although it is difficult to know whether he really believes what he is stating or he is saying this as he owns a lot of shares of SD and Ward is still CEO.

I have been looking at XCO over the last 1 year. I came across it when viewing one of Wilbur Ross's interview a year ago where he admitted to have jumped on it too early. I have very high regard for Howard Marks and Oaktree so I did notice their 17% ownership. There was an opportunity in late Feb 2013 in XCO at prices which I suspect were close to Oaktree's purchase price. I will keep an eye on this over the next year. It is not that easy to have a time horizon of 10 years but I suspect people who can do that can benefit with these contrarian picks.



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 11, 2013 08:35AM

Malaysian state oil and gas firm Petronas to invest $20B over 6 years in its Western Canada LNG export project.



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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 19, 2013 03:50PM

As expected at SD Tom Ward gets the boot. CFO James Bennett named CEO and President. Lead independent director Jeffrey Serota will serve as interim non-executive chairman.



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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 19, 2013 05:52PM

Leon Cooperman thoughts on SD during CNBC interview.



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 21, 2013 08:09AM

Exxon Mobil Corp (XOM) is seeking a license to export 30 million tonnes of liquefied natural gas (LNG) per year to Asian markets from the coast of British Columbia, according to a regulatory filing in Canada.



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Re Chesapeake Energy Ready to Rise
Posted by: vgm (IP Logged)
Date: June 21, 2013 08:55AM

Wilbur Ross on nat gas as a paradigm shift in US and elsewhere. Mentions that export licenses beginning to get approval in Washington, and some 14 or so others in line. Nat gas discussion comes at the beginning nd end of this interview - one of the better ones from Bloomberg:

[www.bloomberg.com]



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