Chesapeake’s house of financial horrors
Chesapeake Energy’s best hope for survival, at least for the near future, may be the same muddled financial structure that has led to the company’s unraveling.
The Oklahoma City-based company is a Frankenstein’s monster of finance, which may deflect takeover bids despite the 34 percent slide in the company’s stock price this year. Chesapeake’s complexity makes it difficult for a potential buyer to determine what the company is worth or what liabilities might come with its properties.
“When there are other properties available that are presented in a straightforward manner, you’d have to think that people will gravitate toward those,” said John White, with Houston-based Triple Double Advisors, an investment manager that specializes in energy.
Despite its convoluted structure, Chesapeake has assembled a prime portfolio of oil and gas wells, which it has drilled with remarkable success. Dry holes are rare.
http://fuelfix.com/blog/2012/05/14/steffy-chesapeakes-house-of-financial-horrors/?utm_source=WhatCountsEmail&utm_medium=FuelFix&utm_campaign=FuelFixNewsLetter
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