Deal targets Texas

Article Excerpt

CHESAPEAKE ENERGY $3.26 (New York symbol CHK; TSINetwork Rating: Speculative) (405-848-8000; www.chk.com; Shares outstanding: 913.7 million; Market cap: $3.0 billion; No dividends paid) will now buyHouston-based WildHorse Research Development Corp. for $4.0 billion. This big purchase gives the company another 420,000 acres in the Eagle Ford and Austin Chalk formations. It also nearly triples its presence in Texas and significantly boosts its oil production. The WildHorse acquisition will also provide lots of new drilling opportunities. Chesapeake’s long-term debt of $9.4 billion is a very high 3.1 times its market cap. But cash flow from the new properties should help the company continue to pay down that debt. Chesapeake Energy is still a buy. buy…

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