July 3 - Antony Currie and Breakingviews columnists explain how Chesapeake's out-of-control exploration costs undermine its recent leadership in finding black gold.
Was taking a look at Chesapeake again today it's been a while based in great photo stories also over the past year -- I don't believe and has announced that selling get another billion dollars of assets now Chris she'd been covering this company full. Quite some time now is it gonna pay for. Go through that -- I finally got rid of him a few months ago. -- the one thing he found just -- -- -- that -- just because she has despite all his problems what are the best records of -- with a -- best record of possibly it's a what's got on the selling assets but that's funding vehicles oil. What it is actually need Estrich what type beat all of that rivals the -- the quantity of oil they've discovered about. 700. Million barrels of oil have recess over the past few years back but he's even Exxon which is about thirteen times larger. It'll save the states on bludgeon incentives to oil market capitalization. The problem is that they paid to gigantic amounts in order to get this position take. If you compare them for example to the nearest rival which is. They spent about 25 billion dollars to get about 700 to that million barrels and. -- energy resources this has got a little bit less than they've been spent at fifteen billion dollars so they've been very very an emotion and this is left them with mountains of debt about it. -- is that this is that what they calling this the land -- stressed right over the clintons though a bit and that got rid of him. For various reasons including the fact that this flagrant strategy would. Sent out to be expensive especially this gas wells and bring in enough revenue and so that as keep telling us to keep borrowing. Even led to keep running low oil and servant and that's kind of believed that leaves them selling. Assets again if you look at the price they've got so these assets is always very hate you because you have to take into account the production that they get out and that always giving this land away so billion dollars so they do actually get that billion dollars right at that relative to the amount of production if so much is at best selling the production make giving the land away for free which is currently not a good position to the end and given all the noise on just because that's just saying their pastor of the company. How come rely bluntly states it is not election she said. Well that probably they probably pushed the limits a bit more than many oil sands state that is -- you compare it. At recess that -- actually drilled and -- started tentative for -- announcement or you can put undiscovered wealth -- -- -- -- -- they tend to do that -- many -- that right front. So the oil is it's that just they they may have been too little and the event -- -- little cautious parents would. But if they've done that and -- is that similarly aggressive on the cost side if you normalize birdies you might by the oil is even more expensive than. And that's exactly will get you more cash flow difficulties involved are -- like -- I'm -- this is gonna be more good fodder for the new C -- trying to deal with. Thus if Russ for this -- my two British colleagues and have a very happy fourth of July and will be back next month.