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Energy Stock Presentation

Energy Stock Presentation. By Matt Miller 10-13-11. Current Energy Holdings. Exxon Mobile Pays a 2.50% Dividend Good opportunity for capital gain appreciation with the opportunity for higher oil prices Weatherford International

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Energy Stock Presentation

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  1. Energy Stock Presentation By Matt Miller 10-13-11

  2. Current Energy Holdings • Exxon Mobile • Pays a 2.50% Dividend • Good opportunity for capital gain appreciation with the opportunity for higher oil prices • Weatherford International • Makes and sells equipment for natural gas and oil exploration and extraction • Coming off its 52 week low with opportunities to rebound

  3. Chesapeake Energy Corporation • Chesapeake Energy Corporation engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. It also provides marketing and other midstream services. The company's properties are located in Alabama, Arkansas, Colorado, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Montana, Nebraska, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming. As of December 31, 2010, it had interests in approximately 45,800 gross productive wells. The company's proved reserves include 17.096 trillion cubic feet of natural gas equivalent. Chesapeake Energy Corporation was founded in 1989 and is based in Oklahoma City, Oklahoma.

  4. Company Fundamentals

  5. Company Fundamentals (cont.)

  6. Company Fundamentals (c0nt.)

  7. Company Fundamentals (cont.)

  8. Company Fundamentals (cont.)

  9. SWOT (Strengths) • Continues to have the industry’s most active drilling program, with a success rate of 98% for company-operated wells, and 99% for nonoperated wells • Deal maker with strong track record and visible out-year projects • Unique ownership of drilling rigs • Acquisitions strengthened the company’s reserve, production, and net acre positions • Investing in new and more lucrative liquid natural gas

  10. SWOT (Weaknesses) • Operations concentrated in the Mid Continent region • A rising cost structure due to the company’s active acquisition strategy • Highly levered financially and operationally

  11. SWOT (Opportunities) • Positioned nicely to take advantage of the booming natural gas market • Has improving balance sheet and low cost of debt • The newly formed Mississippian JV, a Utica JV, the launching of a Granite Wash Trust and possible monetization of CHK's rapidly growing oilfield service business • Shifting focus from resource inventory capture to resource inventory conversion

  12. SWOT (Threats) • Natural gas accounts for about 84% of CHK’s production. If the natural gas markets weaken, CHK’s stock could underperform its peers • Commodity price fluctuations • Government policy and administration, changes to various countries tax rate, especially in the regions it operates

  13. YTD Chart

  14. Fair Value/Growth Estimate • Current Price: $26.25 • 52 Week Range: $20.97 - $35.95 • Fair Value: $29.00 • Consider Buy: $17.40 • Consider Sell: $45.00 • One Year Target: $38.96 • Estimated Five Year Growth: 11.00% • Estimated Next Year Sales Growth: 21.80%

  15. Analyst Opinion

  16. Recommendation • Currently underweight in the energy sector • Buy 75 shares @ $26.25 = $1968.75 • Take advantage of the booming natural gas industry • Growth Stock, plus 1.3% dividend • Shifting from acquisition to extraction • Moving to more profitable liquid natural gas • Own one of the fastest growing companies in an even faster growing industry

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