Topic: How To Invest

Power Growth Investor Hotline – Friday, November 8, 2019

Article Excerpt

CHESAPEAKE ENERGY CORP., $0.90, is now a sell. The company (symbol CHK on New York), is an Oklahoma-based producer of natural gas as well as oil. Chesapeake, co-founded by the late shale pioneer Aubrey McClendon, was once the country’s second-largest natural gas producer. But it has struggled with debt and has sold billions in oil and gas holdings since its CEO Doug Lawler took over in 2013. This includes a $2 billion deal announced in July 2018 to sell its last remaining acreage in Ohio’s Utica Shale. Investors saw their shares fall 40% this week after the company missed earnings and revenue forecasts. Chesapeake also laid out the challenges to keeping the company “a going concern.” The main reason for that warning to investors is the company’s huge debt. Chesapeake’s long-term debt of $9.13 billion is a very high 8.9 times its depressed market cap. Much of that comes with restrictions that lenders have put in place, known as covenants. This can impose…

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