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141 comments on Energy Margin Calls- Chesapeake CEO Forced To Sell All His Stock

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Gail the Actuary on October 10, 2008 - 8:12pm Permalink | Subthread | Comments top

One thing that has struck me in the past about natural gas producers is how small any of them are relative to the total. Chesapeake's 2007 annual report shows that it produced 655 billion cubic feet of natural gas last year. Total US consumption was 23,052 billion cubic feet. US produced marketed production was 20,151 billion cubic feet. Using whatever base you like, it seems like Chesapeake is at most 3% of total US production/consumption.

At this size, do you expect that the federal government is going to worry about taking care of them? I can see a Morgan Stanley, or and Exxon Mobil, or a Citibank. Isn't there a chance they will just slip under the Federal Government radar, as one more over-leveraged company, whose president bought too much stock on margin?

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Nate Hagens on October 10, 2008 - 8:21pm Permalink | Subthread | Parent | Comments top

See my edit above - XTO Chairman sold over $100,000,000 of stock this week too. Together those 2 companies were responsible for the majority of production growth in past couple years - as you've written about, mostly financed with borrowing than from internal cash flow. XTO is just behind Chesapeake with 1.8 bcf per day. So now your up to almost 6% of US production. How many others are out there?
And almost as important, CHK operates 130 rigs, and XTO 70 out of about 1600 drilling for nat gas.

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Energy Maven on October 11, 2008 - 12:45pm Permalink | Subthread | Parent | Comments top

There are about 40 public co that represent 66% of operated production.
The top 5(as of JUN/08) are:
CHK 2.167Bcf/da
BP 2.140
COP 2.132
DVN 1.939
APC 1.869

Their prod of 10.247Bcf/da is 18.6% of US daily prod of 55.2B.

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141 comments on Energy Margin Calls- Chesapeake CEO Forced To Sell All His Stock

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