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Started By
Message
Help from the MB minds - CHK
Posted on 5/3/12 at 8:03 am
Posted on 5/3/12 at 8:03 am
Link
I'm generally not one to give a lot of concern to online fodder, but I have to admit I'm a little concerned. I could probably list all 20 or so of the articles I've read over the past 2 days, but they're basically all the same, fueled by the same Reuters investigations.
I've got no financial background and to be honest, most of this stuff makes my head spin. But I do know enough to realize that SEC investigations generally aren't a good thing, price fixing accusations generally aren't a good thing, a 40% drop in stock prices over the course of a week is never good and the quarterly financial report shows a net loss of 71 million.
As if all that isn't bad enough, I've heard grmblongs in the office about 'expected' layoffs, cutting back a third of our operating rigs, etc. I know that's all probably speculation and office rumor, but it sort of feels like this sort of thing has the potential to grow legs. I moved my wife and kids up here to OKC because it was a better opportunity and I don't really feel like going back to the gulf of Mexico rigs, but the question remains:
As a chk employee, should I be worried?
I'm generally not one to give a lot of concern to online fodder, but I have to admit I'm a little concerned. I could probably list all 20 or so of the articles I've read over the past 2 days, but they're basically all the same, fueled by the same Reuters investigations.
I've got no financial background and to be honest, most of this stuff makes my head spin. But I do know enough to realize that SEC investigations generally aren't a good thing, price fixing accusations generally aren't a good thing, a 40% drop in stock prices over the course of a week is never good and the quarterly financial report shows a net loss of 71 million.
As if all that isn't bad enough, I've heard grmblongs in the office about 'expected' layoffs, cutting back a third of our operating rigs, etc. I know that's all probably speculation and office rumor, but it sort of feels like this sort of thing has the potential to grow legs. I moved my wife and kids up here to OKC because it was a better opportunity and I don't really feel like going back to the gulf of Mexico rigs, but the question remains:
As a chk employee, should I be worried?
3
Posted on 5/3/12 at 8:16 am to BROffshoreTigerFan
I would be
Posted on 5/3/12 at 8:23 am to BROffshoreTigerFan
quote:
As a chk employee, should I be worried?
I'd just warn you against being too proactive in trying to figure out the next move. I've tried to get out ahead of things like this before and it wasn't needed. Any layoff will probably come with a severance package to carry you to the next job vs you looking on your own time.
This post was edited on 5/3/12 at 8:23 am
Posted on 5/3/12 at 8:28 am to C
quote:
I'd just warn you against being too proactive in trying to figure out the next move. I've tried to get out ahead of things like this before and it wasn't needed. Any layoff will probably come with a severance package to carry you to the next job vs you looking on your own time.
Yeah, I'm not actively looking for anything. I know if worse comes to worse, it'll only take a phone call or two to get on a rig in the gulf, which obviously would be last resort for me.
thanks CPosted on 5/3/12 at 9:21 am to BROffshoreTigerFan
you don't think you could get on somewhere similiar to chk ?
Posted on 5/3/12 at 9:31 am to Zilla
quote:
you don't think you could get on somewhere similiar to chk ?
I'm more concerned about the length of time it would take rather than if I could get on. It comes at a bad time financially as our house just sold in Louisiana and we had to use a significant portion of our savings to close. I've still got a couple months saved up, but if there are massive layoffs, plenty of people will be looking at competitors for jobs. I have a unique skill that is used by many oil companies and that could give me an edge, but I'm not sure if it's a real significant edge. From the day that chk offered me the position, it was still 3 or 4 months before I started. These companies move at a snails pace especially if there's a relocation package offered.
Posted on 5/3/12 at 9:47 am to BROffshoreTigerFan
McClendon has treated his public company like his private company which coupled with his intense need to be in front of cameras and CHK's recent (though long coming) financial issues are going to bring him down.
I'd also say that if gas prices stay low for another couple of years CHK is going to go down in flames. Over this next year you will see them trot out properties every few months to sell off to fund their gaping capital shortfall. As an employee don't you find it alarming that you're selling what is likely your most valuable asset - your Permian??? CHK got too far out ahead of its skis...
You should look now and not wait for a crash or a massive restructuring.
I'd also say that if gas prices stay low for another couple of years CHK is going to go down in flames. Over this next year you will see them trot out properties every few months to sell off to fund their gaping capital shortfall. As an employee don't you find it alarming that you're selling what is likely your most valuable asset - your Permian??? CHK got too far out ahead of its skis...
You should look now and not wait for a crash or a massive restructuring.
Posted on 5/3/12 at 9:55 am to gonads&strife
frick
Posted on 5/3/12 at 9:59 am to gonads&strife
I don't see how they are letting this joker stay in office. I saw something yesterday he was running a private 200 million hedge fund too? Obviously they are gonna have to do some restructuring. Their effort to shift some gas to oil assets maybe their saving grave though I don't know this has materialized and whether they can even compete on profitability with oil companies.
Idk could CHK now be a take over target? Pretty absurd call on my part, but Exxon bought XTO. If I was a big boy O&G and wanted more NG exposure, now maybe the time to get a company on the cheap? But that probably also wouldn't be good for employees. Tough to say, I would be concerned. But your skill set will likely be in demand
Idk could CHK now be a take over target? Pretty absurd call on my part, but Exxon bought XTO. If I was a big boy O&G and wanted more NG exposure, now maybe the time to get a company on the cheap? But that probably also wouldn't be good for employees. Tough to say, I would be concerned. But your skill set will likely be in demand
Posted on 5/3/12 at 10:04 am to donRANDOMnumbers
quote:
frick
My thoughts exactly don.
quote:
I'd also say that if gas prices stay low for another couple of years CHK is going to go down in flames. Over this next year you will see them trot out properties every few months to sell off to fund their gaping capital shortfall. As an employee don't you find it alarming that you're selling what is likely your most valuable asset - your Permian??? CHK got too far out ahead of its skis...
Very much, and those were my thoughts and concerns also.
quote:
I don't see how they are letting this joker stay in office. I saw something yesterday he was running a private 200 million hedge fund too? Obviously they are gonna have to do some restructuring. Their effort to shift some gas to oil assets maybe their saving grave though I don't know this has materialized and whether they can even compete on profitability with oil companies.
He's supposedly stepping down as chairman of the board, but maintaining his position as CEO, from what I've heard/read. Don't know how that will effect the business though.
Blah. This blows
Posted on 5/3/12 at 10:10 am to BROffshoreTigerFan
Although this is kind off of the subject of the OP, I just got through doing contract work for the past 10 months in the Eagle Ford for CHK. I'm not sure how things are run in OKC, but the guys in Pearsall, TX are not the brightest bunch. In fact, I've seen snoball stands that were run with more business sense. If OKC is anything like the management team in the Eagle Ford, look out.
This post was edited on 5/3/12 at 10:17 am
Posted on 5/3/12 at 10:25 am to greenhead11
Eh I'm not sure XTO is a good comparison. CHK is in a shitstorm because of the CEO being a clown yes, but its obviously financially driven by gas prices. When XOM bought XTO spot prices were at $6, not $1.90.
Personally I'd just wait out the carnage a little longer and would position myself for control in bk by trying to identify the fulcrum debt in such a situation and buying it up, but I realize that's not the way companies go about acquiring other companies. It wouldn't surprise me if someone made an offer given its current sub 12B market cap, but I'm not sure the takeover premium wouldn't be too much to make it not worthwhile, and I have a feeling that shareholders are going to want a big one given its fairly precipitous fall. eta: Yes terrible engrish, :dealwithit:
Personally I'd just wait out the carnage a little longer and would position myself for control in bk by trying to identify the fulcrum debt in such a situation and buying it up, but I realize that's not the way companies go about acquiring other companies. It wouldn't surprise me if someone made an offer given its current sub 12B market cap, but I'm not sure the takeover premium wouldn't be too much to make it not worthwhile, and I have a feeling that shareholders are going to want a big one given its fairly precipitous fall. eta: Yes terrible engrish, :dealwithit:
This post was edited on 5/3/12 at 10:27 am
Posted on 5/3/12 at 2:30 pm to kfizzle85
I'd just buy their Permian which is on the market, then wait for their Utica to come up for sale, then let them hit the skids and try to pick up their gas positions for pennies on the dollar.
Posted on 5/3/12 at 2:36 pm to gonads&strife
I'm in it deep. Wondering if I should pull it and wait for a big pullback to make it up.
Posted on 5/3/12 at 2:47 pm to kfizzle85
quote:
CHK is in a shitstorm because of the CEO being a clown yes
How many more instances of executive looting is it going to take for shareholders of public companies to man up and right the ship?? I have been tired of this shite for over a decade, and no, I don't own any CHK shares. Total comp in general is totally beyond reason from my POV. If management is so fricking awesome let them go start their own company and see how much of their own profits they can generate and retain.
To OP, selectively work on short list of good opps for you and if things continue to make you uncomfortable get more active.
Posted on 5/3/12 at 3:09 pm to donRANDOMnumbers
quote:
I'm in it deep. Wondering if I should pull it and wait for a big pullback to make it up.
This makes no sense to me.
quote:
e let them go start their own company and see how much of their own profits they can generate and retain.
While he is being a clown, almost certainly will/needs to go, and since its public its not "his" company (and I'm not sure how many shares he owns as of today), he did start the company from the ground up. Just saying its not like he's some marauding Harvard b-school grad coming in.
Posted on 5/3/12 at 3:31 pm to gonads&strife
quote:
CHK got too far out ahead of its skis...
This. They paid 15 - 30 thousand dollars an acre for a whole lot of Haynesville Shale acreage. I heard there financial calcs/risk assesment where done for ~$6-7 / 1000 cu. ft. natural gas. Natural gas has been below that price range for over 3 years.
I'm surprised they've made it this long without going under to be honest.
Posted on 5/3/12 at 3:58 pm to LSU0358
The thing is CHK has amazing AC positions in nearly every important shale play...it's just an undisciplined poorly managed company that is just way way way over extended. Lots of folks (big boys) are going to jump on this carcass.
Posted on 5/3/12 at 4:05 pm to gonads&strife
quote:
Lots of folks (big boys) are going to jump on this carcass.
My money was on Exxon for a full buyout before they bought XTO. Now the bigboys will break them apart field by field.
Posted on 5/3/12 at 4:06 pm to gonads&strife
quote:
The thing is CHK has amazing AC positions in nearly every important shale play...it's just an undisciplined poorly managed company that is just way way way over extended. Lots of folks (big boys) are going to jump on this carcass.
This isn't entirely unexpected when a land man runs the company. He likes to buy leases often by borrowing money and it's hurt them before. This time might prove to be fatal. We probably are going to see the fate of smaller gassy producers like SWN, CRK, GDP, and others prior to CHK having their day of reckoning since selling the permian can buy them a little bit of time.
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