Hey Dan:
Just wondering what your thoughts are related to Carl Icahn's 5%+ investment in CHK. Everyone knows that the near term outlook for NG prices is lousy, but most folks think that there is a lot of value in CHK's assets and Icahn will do his best to stir things up.
I already had a position in CHK and added some more at $23.85 the morning after Icahn's stake was announced. CHK has moved up almost $2 since the announcement.
I don't think Icahn bought into CHK to wait for higher gas prices and I also don't think he bought in for couiple of points in the stock. He's got to be thinking that he can make a large percentage gain on CHK.
Another observation is that the buyout action in gas properties (e.g. HK's sale to ExxonMobil/XTO within the last week) tells you that the majors think that NG assets are at bargain basement prices right now.
Clearly, NG is out of favor right now, but if you've got a little bit of patience, isn't that the time to buy?
What say you?
MrMuileh (Phil)
CHK - Carl Icahn
Re: CHK - Carl Icahn
Long-term I remain bullish on natural gas. It is clearly the fuel of the future for the United States. However, I think the price will remain depressed in 2011 so my focus is on those companies heavily weighted to oil or "gassers" that are moving that way (i.e. - CRZO).
CHK is in great shape to make it through 2011. They have 90% of 2011 NG hedged at $5.84/mcf. They also will be focused on increasing their liquids production. They have some very good Eagle Ford acreage.
In just the past 18 months, CHK has captured leading positions in 5 of the 6 best
unconventional oil plays in the U.S.
#2 in the Eagle Ford with 425,000 net acres and 2.4 bboe of unrisked unproved resources
#1 in the Niobrara with 800,000 net acres and 4.5 bboe of unrisked unproved resources
#1 in the Anadarko with 1,000,000 net acres and 3.8 bboe of unrisked unproved resources
#1 in the Permian with 675,000 net acres and 1.9 bboe of unrisked unproved resources
You guess is as good as mine as to what Carl Icahn is up to but I'm sure he has a plan.
CHK is in great shape to make it through 2011. They have 90% of 2011 NG hedged at $5.84/mcf. They also will be focused on increasing their liquids production. They have some very good Eagle Ford acreage.
In just the past 18 months, CHK has captured leading positions in 5 of the 6 best
unconventional oil plays in the U.S.
#2 in the Eagle Ford with 425,000 net acres and 2.4 bboe of unrisked unproved resources
#1 in the Niobrara with 800,000 net acres and 4.5 bboe of unrisked unproved resources
#1 in the Anadarko with 1,000,000 net acres and 3.8 bboe of unrisked unproved resources
#1 in the Permian with 675,000 net acres and 1.9 bboe of unrisked unproved resources
You guess is as good as mine as to what Carl Icahn is up to but I'm sure he has a plan.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group