The stock has regained Tuesday's closing price ($19.08) and is currently at $19.13, up 47 cents.
On July 6th the stock closed above $20, a level it had not seen since April.
From the Wall Street Journal:
Chesapeake Reserve Doubted
An independent research firm called into question the size of Chesapeake Energy Corp.'s proved reserves of oil and natural gas, an important metric institutional investors use to value energy producers, in a report published this week.It would be interesting to know if those who commissioned ITG included any Icahn entities.
The report, by ITG Investment Research, comes as controversy continues to swirl around Oklahoma City based Chesapeake, the nation's second largest producer of natural gas after Exxon Mobil Corp. The company, which has been battered by decade-low prices for its main product, has been selling assets to stave off liquidity problems. Shareholders have forced the company's board to replace several directors and to appoint an independent chairman to replace co-founder Aubrey McClendon, who remains chief executive.
The report zeroed in on reserves in the Barnett and Haynesville shale formations in Texas and Louisiana, which make up 42% of the gas the company estimates is in fields it owns. ITG calculated reserves for Chesapeake's developed wells in that region at 2.8 trillion cubic feet, 70% of the amount estimated by a third-party engineering firm for Chesapeake's 2011 annual report. That difference accounts for approximately 12% of what Chesapeake estimates is left in all of its existing wells.
Chesapeake's engineering consultant, Netherland, Sewell & Associates Inc. generated its estimate with internal information provided by the company. ITG relied solely on public information. The report attributes the variance between the estimates to "differing type curve assumptions," referring to how quickly production volumes will decline.
Chesapeake and Netherland, Sewell said their estimates are accurate. "Our independent engineers at Netherland, Sewell & Associates, Inc. have been determining reserves for over 50 years and evaluating Chesapeake reserve assets for over 10 years using the most comprehensive data set available," a Chesapeake spokesman said. "We are confident in the accuracy of their reports and our public filings based on them."
Chesapeake's stock has fallen seven percent since Tuesday, when ITG published the report, closing at $18.66 on Thursday....MORE
