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Is Oil Price Recovery Enough for CHK Stock?

PART:
1 2 3 4 5
Part 2
Is Oil Price Recovery Enough for CHK Stock? PART 2 OF 5

Can Crude Oil Prices Offset Negative Speculation for CHK Stock?

CHK’s 3Q17 oil production expectations toned down

Another negative development last week was Chesapeake Energy’s (CHK) announcement on September 26, 2017, that due to events related to Hurricane Harvey, asset sales, and adjustments in its capital allocation, the company expects its 3Q17 production to be lower than its 2Q17 production. The company is forecasting its 3Q17 oil volumes to be ~86,000 barrels of oil per day compared to 2Q17 oil volumes of ~88,400  barrels of oil per day. Lower volumes could result in lower 3Q17 oil revenues.

Can Crude Oil Prices Offset Negative Speculation for CHK Stock?

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For 2017, Chesapeake Energy (CHK) had previously provided a production growth guidance range of 0.0%–4.0%. While the company said that the above impacts would be limited to 3Q17, it will be revising its guidance for the full year.

In a presentation released on September 26, the company said that it expects to see accelerated production in 4Q17 due to its TIL (or turn-in-line) wells. To learn more about CHK’s production trends, read Gamble or Scramble: How Would You Play Chesapeake Energy?

Effect on CHK stock

On the heels of this announcement came CHK’s announcement that it will issue more debt. Read the previous part to know how these recent developments have affected CHK’s stock. As we saw in the previous part, CHK stock still managed to close higher on a weekly basis despite these negative developments, likely as a result of higher crude oil prices.

Investors will watch to see if continued improvement in energy prices can offset negative speculation for CHK stock. Keep watching Market Realist as we track weekly stock movements and upcoming earnings.

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