Chesapeake Energy Corparation
Chesapeake Energy Corporation (NYSE: CHK), headquartered in Oklahoma City, Oklahoma, "owns 1.1 trillion cubic feet equivalent (tcfe) of proved oil and gas reserves, one of the largest inventories of onshore U.S. natural gas" {Chesapeake Annual Report, 1998, p. 1}. Recently, Chesapeake finished the transformation from an aggressive exploration company focused on developing short-reserve life, to a lower-risk, longer reserve life natural gas producer.Chesapeake's operations are focused on "developmental drilling and producing property acquisitions." These operations are "concentrated in three major areas: the Mid-continent, the onshore Gulf of Mexico and far northeastern British Columbia, Canada" [Chesapeake Annual Report, 1998, p. 1].Aubrey K. McClendon is Chesapeake's Chairman of the Board, Chief Executive Officer and Director. Tom L. Ward is the President, Chief Operating Officer and Director. "McClendon met cofounder Tom Ward in the 1980'
Both were independent oil producers; they teamed up in 1983" [Morgenson, p. The quick ratios are as follows: . Cohen, Milstein, Hausfeld & Toll, P. New technology in the oil and gas industry has made exploration and production more profitable. The result was 1998 EBIT of ($920) million, and a non-existent ROE, since the company had a net loss approaching $1 billion. Additionally, in 1997, Chesapeake changed their fiscal year end from June 30th to December 31st. Unocal Corporation, 1998 10-K, El Segundo, California. This resulted in a reduced current ratio of . Cash flow from operations was approximately $95 million in 1998 and $180 million in 1997, while cash flow from financing was $365 million and $278 million respectively. Future investors of Chesapeake equities should consider this fact prior to making any investment decisions. The company has several restrictions from being able to borrow additional funds. The oil and gas industry is tightly regulated in regard to labor relations by government department and agencies, including the Occupational Safety and Health Association (OSHA) and the National Labor Relations Board (NLRB).
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