Topic: Growth Stocks

Stock Pickers Digest Hotline – Friday, October 15, 2010

Article Excerpt

CHESAPEAKE ENERGY CORP., $22.99, symbol CHK on New York, has agreed to sell a third of its wholly owned Eagle Ford shale-gas project in south Texas to Chinese state-owned oil company CNOOC Ltd. (symbol CEO on New York). Shale gas is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. CNOOC will pay Chesapeake $1.08 billion for the Eagle Ford stake when the sale closes by the end of 2010. As well, CNOOC will pay up to 75% of Chesapeake’s share of the development costs, up to an additional $1.08 billion. To put these figures in context, Chesapeake earned $491 million, or $0.75 a share, before unusual items in the three months ended June 30, 2010. Chesapeake expects Eagle Ford to begin operating in 2012. When it reaches full production over the next 10 years, it will produce up to 3 million cubic…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.