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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 21, 2013 03:20PM

Hi Vgm,
Thanks for posting the nice interview. Whether North American energy independence is indeed going to be a game changer or whether it ends up being a lot of hype is one of the big questions to ponder. I think the US industries including chemicals will likely benefit a lot and low energy prices and input costs would benefit most manufacturing companies as well.

One question that sticks in my mind is whether uncovering shale resources and tapping them is possible in other areas of the world. If this does happen at a fast pace then potential to profit from natural gas export to Asia could diminish and the opportunity window could be narrow. I hope the governments in North America will act in an agile and responsible manner.



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Re Chesapeake Energy Ready to Rise
Posted by: vgm (IP Logged)
Date: June 21, 2013 04:58PM

Hi Mritik,

Thanks for your interesting thoughts. My take is that shale gas will indeed be a game changer in the US - definitely for the chemical industry and manufacturing as you mention, but other areas too, including (heavy) transport. Wilbur is clearly optimistic that the export of nat gas will become a reality and has got himself in position in the shipping of LPG.

Yes, a number of countries are discovering their own shale gas deposits. China purportedly has more than the US, but it's at deeper levels in the earth's crust and may be in smaller pools. The Chinese have little or no experience in fracking and they are setting up JVs with US entities to gain experience. Wilbur has been involved in the auctioning of these JVs thru Exco:
[m.gurufocus.com]
[www.bbc.co.uk]

In contradistinction, I recall Munger saying that he thought the US was 'nuts' to be exporting its own energy! Buffett seemed to be in agreement.



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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: June 22, 2013 09:01AM

Hi Vgm,
Thanks for the info. I am looking at natural gas infrastructure companies like KMI as well since they should benefit from this export potential.



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Re Chesapeake Energy Ready to Rise
Posted by: vgm (IP Logged)
Date: June 28, 2013 07:49PM

"Natural Gas Vehicles: In for the Long Haul"

[business.financialpost.com]



Guru Discussed: Bruce Berkowitz: Current Portfolio, Stock Picks
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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: July 9, 2013 10:39AM

Petronas in talks to sell 10% stake in Canada shale to Indian Oil.



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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: September 18, 2013 03:11PM

The change a competent and shareholder friendly management can have on a mismanaged company cannot be overstated. Doug Lawler has done an excellent job in cleaning up the company and righting the balance sheet. Although CHK is significantly up from $18 to $27 reversion to mean for Natural Gas prices could provide continued upside for long term shareholders.



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Re Chesapeake Energy Ready to Rise
Posted by: vgm (IP Logged)
Date: September 18, 2013 05:45PM

Hi Mritik,

Interesting point about Doug Lawler. I read some comments from a value fund manager recently who made the observation that he thought CHK today is like BAC three or four years ago in needing a CEO who would rationalize the company and its great asset base.

Lawler is doing all the right things in transforming the (terrific) assets Aubrey amassed into a more coherent story - just as you say. The timing of your piece was outstanding. And I agree the prospects are still looking good too. Glad to be an owner.



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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: September 18, 2013 06:41PM

Hi Vgm,

Its nice that CHK has worked out well for you. Timing was partly luck and the other part we can put down to the odds being skewed to the upside. NatGas price was depressed, balance sheet was in bad shape, prior management was poor and shareholder unfriendly. With Carl Icahn and Long Leaf as investors and change imminent there were a lot of catalysts.

Let us see how things turnout over the next year. I think CHK can buy back shares meaningfully from next year if natural gas prices recover. A part of me wishes that CHK price would haveclanguished for another year under $20!

I also like XCO for the long term and I am optimistic with Oaktree as a major investor.



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Re Chesapeake Energy Ready to Rise
Posted by: MritikCapital (IP Logged)
Date: October 25, 2013 10:18AM

CHK getting closer to fair value. Leverage to natural gas price gain and possibility of takeover premium cannot be ruled out.



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Re Chesapeake Energy Ready to Rise
Posted by: vgm (IP Logged)
Date: October 25, 2013 06:37PM

H Mritik,
Thanks for sharing your thoughts. To me the good times are just beginning for CHK and expect it to go much higher in the next 3-5 years as financial discipline gets embraced and their balance sheet continues to improve. Southeastern certainly have a much higher valuation on it going forward. There was talk of a buyout at $40 which I think is way too low. Can't see Icahn or Mason Hawkins supporting it at that level. I was in below $17 and plan to hold. Good luck.



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