Chesapeake Energy Corp. (CHK, Financial) filed Amended Quarterly Report for the period ended 2010-03-31.
Chesapeake Energy Corp. has a market cap of $13.69 billion; its shares were traded at around $21.03 with a P/E ratio of 7.2 and P/S ratio of 1.8. The dividend yield of Chesapeake Energy Corp. stocks is 1.4%. Chesapeake Energy Corp. had an annual average earning growth of 14.7% over the past 10 years. GuruFocus rated Chesapeake Energy Corp. the business predictability rank of 2-star.CHK is in the portfolios of Mason Hawkins of Southeastern Asset Management, Arnold Schneider of Schneider Capital Management, T Boone Pickens of BP Capital, Oak Value of Oak Value Capital Management, Oak Value of Oak Value Capital Management, Ronald Muhlenkamp of Muhlenkamp Fund, David Winters of Wintergreen Advisors, Carl Icahn of Icahn Capital Management LP, Bruce Kovner of Caxton Associates, John Buckingham of Al Frank Asset Management, Inc., Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, David Dreman of Dreman Value Management, Charles Brandes of Brandes Investment, Kenneth Fisher of Fisher Asset Management, LLC, Jeremy Grantham of GMO LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Our exploration, development and acquisition activities require us to make substantial capital expenditures. Our current budgeted drilling and completion capital expenditures, net of drilling carries, are $4.2 billion to $4.5 billion in 2010 and $4.3 billion to $4.6 billion in 2011. While we believe that our anticipated internally generated cash flow, asset monetizations, cash resources and other sources of liquidity will allow us to fully fund our 2010 operating and capital expenditure requirements, further deterioration of the economy and other factors could require us to curtail our spending.
Our $3.5 billion corporate revolving bank credit facility, our $250 million midstream revolving bank credit facility and cash and cash equivalents are other sources of liquidity. At May 5, 2010, there was $1.689 billion of borrowing capacity available under the corporate credit facility and $213 million of borrowing capacity under the midstream credit facility. We use the facilities and cash on hand to fund daily operating activities and capital expenditures as needed. We borrowed $2.924 billion and repaid $2.944 billion in the Current Quarter, and we borrowed $1.575 billion and repaid $3.120 billion in the Prior Quarter from our revolving credit facilities. A substantial portion of our natural gas and oil properties is currently unencumbered and therefore available to be pledged as additional collateral under our corporate revolving bank credit facility if needed based on our periodic borrowing base and collateral redeterminations. Accordingly, we believe our borrowing capacity under this facility will not be reduced as a result of any such future periodic redeterminations. Our midstream facility is secured by substantially all of our wholly owned midstream assets and is not subject to periodic borrowing base redeterminations.
On February 2, 2009, we completed a public offering of $1.0 billion aggregate principal amount of senior notes due 2015, which have a stated coupon rate of 9.5% per annum. The senior notes were priced at 95.071% of par to yield 10.625%. On February 17, 2009, we completed an offering of an additional $425 million aggregate principal amount of the 9.5% Senior Notes due 2015. The additional senior notes were priced at 97.75% of par plus accrued interest from February 2 to February 17, 2009 to yield 10.0% per annum. Net proceeds of $1.346 billion from these two offerings were used to repay outstanding indebtedness under our corporate revolving bank credit facility, which we reborrow from time to time to fund drilling and leasehold acquisition initiatives and for general corporate purposes. There were no other debt or equity issuances in the Prior Quarter and none in the Current Quarter.
Our accounts receivable are primarily from purchasers of natural gas and oil ($751 million at March 31, 2010) and exploration and production companies which own interests in properties we operate ($523 million at March 31, 2010). This industry concentration has the potential to impact our overall exposure to credit risk, either positively or negatively, in that our customers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We generally require letters of credit or parent guarantees for receivables from parties which are judged to have sub-standard credit, unless the credit risk can otherwise be mitigated. During the Current Quarter and the Prior Quarter, we recognized $0 and $8 million of bad debt expense related to potentially uncollectible receivables.
Cash used in investing activities declined significantly in the Current Quarter, primarily because of the offsetting proceeds received in the Current Quarter in connection with the closing of the Total joint venture ($800 million) and our sixth VPP ($180 million). Cash used in investing activities decreased to $1.014 billion during the Current Quarter, compared to $2.367 billion during the Prior Quarter. Our natural gas and oil investing activities in the Current Quarter included $867 million of expenditures for leasehold and unproved property acquisitions, an increase of $610 million over Prior Quarter spending, reflecting our efforts to increase our oil and liquids-rich leasehold. Expenditures for exploration and development were $979 million in the Current Quarter, compared to $1.272 billion in the Prior Quarter, a decrease of $293 million or 23%, reflecting our reduced level of drilling activity in response to low natural gas prices over the past year, as well as the receipt of more drilling carries in the Current Quarter. In other investing activities, additions to other property and equipment declined to $279 million in the Current Quarter from $667 million in the Prior Quarter as a result of a reduction in the building of gathering systems. The following table shows our cash used in (provided by) investing activities during these periods:
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Chesapeake Energy Corp. has a market cap of $13.69 billion; its shares were traded at around $21.03 with a P/E ratio of 7.2 and P/S ratio of 1.8. The dividend yield of Chesapeake Energy Corp. stocks is 1.4%. Chesapeake Energy Corp. had an annual average earning growth of 14.7% over the past 10 years. GuruFocus rated Chesapeake Energy Corp. the business predictability rank of 2-star.CHK is in the portfolios of Mason Hawkins of Southeastern Asset Management, Arnold Schneider of Schneider Capital Management, T Boone Pickens of BP Capital, Oak Value of Oak Value Capital Management, Oak Value of Oak Value Capital Management, Ronald Muhlenkamp of Muhlenkamp Fund, David Winters of Wintergreen Advisors, Carl Icahn of Icahn Capital Management LP, Bruce Kovner of Caxton Associates, John Buckingham of Al Frank Asset Management, Inc., Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, David Dreman of Dreman Value Management, Charles Brandes of Brandes Investment, Kenneth Fisher of Fisher Asset Management, LLC, Jeremy Grantham of GMO LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Highlight of Business Operations:
Finally, we are targeting repayment of up to $3.5 billion of senior indebtedness. We will repay $600 million of certain outstanding senior notes with the proceeds from the private placements of preferred stock referred to above. We also plan to seek to repay up to an additional $2.9 billion of senior notes over the next 24 months using proceeds from the $500 million of additional preferred stock referred to above, the sale of the equity interest in Chesapeake Appalachia referred to above, the potential joint ventures referred to above and/or other asset monetizations.Our exploration, development and acquisition activities require us to make substantial capital expenditures. Our current budgeted drilling and completion capital expenditures, net of drilling carries, are $4.2 billion to $4.5 billion in 2010 and $4.3 billion to $4.6 billion in 2011. While we believe that our anticipated internally generated cash flow, asset monetizations, cash resources and other sources of liquidity will allow us to fully fund our 2010 operating and capital expenditure requirements, further deterioration of the economy and other factors could require us to curtail our spending.
Our $3.5 billion corporate revolving bank credit facility, our $250 million midstream revolving bank credit facility and cash and cash equivalents are other sources of liquidity. At May 5, 2010, there was $1.689 billion of borrowing capacity available under the corporate credit facility and $213 million of borrowing capacity under the midstream credit facility. We use the facilities and cash on hand to fund daily operating activities and capital expenditures as needed. We borrowed $2.924 billion and repaid $2.944 billion in the Current Quarter, and we borrowed $1.575 billion and repaid $3.120 billion in the Prior Quarter from our revolving credit facilities. A substantial portion of our natural gas and oil properties is currently unencumbered and therefore available to be pledged as additional collateral under our corporate revolving bank credit facility if needed based on our periodic borrowing base and collateral redeterminations. Accordingly, we believe our borrowing capacity under this facility will not be reduced as a result of any such future periodic redeterminations. Our midstream facility is secured by substantially all of our wholly owned midstream assets and is not subject to periodic borrowing base redeterminations.
On February 2, 2009, we completed a public offering of $1.0 billion aggregate principal amount of senior notes due 2015, which have a stated coupon rate of 9.5% per annum. The senior notes were priced at 95.071% of par to yield 10.625%. On February 17, 2009, we completed an offering of an additional $425 million aggregate principal amount of the 9.5% Senior Notes due 2015. The additional senior notes were priced at 97.75% of par plus accrued interest from February 2 to February 17, 2009 to yield 10.0% per annum. Net proceeds of $1.346 billion from these two offerings were used to repay outstanding indebtedness under our corporate revolving bank credit facility, which we reborrow from time to time to fund drilling and leasehold acquisition initiatives and for general corporate purposes. There were no other debt or equity issuances in the Prior Quarter and none in the Current Quarter.
Our accounts receivable are primarily from purchasers of natural gas and oil ($751 million at March 31, 2010) and exploration and production companies which own interests in properties we operate ($523 million at March 31, 2010). This industry concentration has the potential to impact our overall exposure to credit risk, either positively or negatively, in that our customers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We generally require letters of credit or parent guarantees for receivables from parties which are judged to have sub-standard credit, unless the credit risk can otherwise be mitigated. During the Current Quarter and the Prior Quarter, we recognized $0 and $8 million of bad debt expense related to potentially uncollectible receivables.
Cash used in investing activities declined significantly in the Current Quarter, primarily because of the offsetting proceeds received in the Current Quarter in connection with the closing of the Total joint venture ($800 million) and our sixth VPP ($180 million). Cash used in investing activities decreased to $1.014 billion during the Current Quarter, compared to $2.367 billion during the Prior Quarter. Our natural gas and oil investing activities in the Current Quarter included $867 million of expenditures for leasehold and unproved property acquisitions, an increase of $610 million over Prior Quarter spending, reflecting our efforts to increase our oil and liquids-rich leasehold. Expenditures for exploration and development were $979 million in the Current Quarter, compared to $1.272 billion in the Prior Quarter, a decrease of $293 million or 23%, reflecting our reduced level of drilling activity in response to low natural gas prices over the past year, as well as the receipt of more drilling carries in the Current Quarter. In other investing activities, additions to other property and equipment declined to $279 million in the Current Quarter from $667 million in the Prior Quarter as a result of a reduction in the building of gathering systems. The following table shows our cash used in (provided by) investing activities during these periods:
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