Natural Gas News – February 26, 2018

Natural Gas News – February 26, 2018

Analysts Still Meh on Chesapeake Despite Earnings Bump

Forbes reported: Christmas came really late for Chesapeake Energy, whose stock jumped 21.7% on the New York Stock Exchange Thursday to close at $3.20 per share. The reason? Its fourth-quarter earnings came in much better than expected on the back of higher production, stronger commodity pricing and lower operating costs. So why the long faces among the stock analyst community? The Oklahoma City-based company expects a decrease in oil production year-over-year, 11% lower than expectations. It previously told analysts it expected flat production and some such as Kashy Harrison of Piper Jaffray’s Simmons & Co. – anticipated modest increases. Observers are also concerned about asset sales. The company wants to pay down its crippling $10 billion debt load this year by $2 billion to $3 billion, which analysts at Tudor, Pickering, Holt expect would require $1.5 billion in divestitures. Buyers’ appetite for large acquisition and divestiture transactions has been tepid, analysts at Seaport Global Securities.

March NYMEX Natural Gas up 4.7 Cents at $2.672/MMBtu Ahead of Contract Expiry

Platts reported: NYMEX March natural gas futures rose on short covering ahead of Monday’s open and the expiry of the contract at the close of business. Although forecasts show average to below-average temperatures spreading across the central and eastern US, moderate conditions associated with the season suggest limited weather-related demand support. Fresh National Weather Service outlooks show below-average temperatures over nearly the whole West, fringes of the Midwest and a small patch of the Southeast in the 6-10 day period, before shrinking slightly but still covering most of the West, slightly more of the Midwest, the lower tier of the mid-Atlantic, all of the Southeast and about half of the Gulf Coast in the 8-14 day period.