Is Geopark Ltd (NYSE:GPRK) in Overbought Territory?

Geopark Ltd (NYSE:GPRK)

GeoPark is an independent Latin oil and gas explorer, operator and consolidator with oil and gas assets and growth platforms in Chile, Colombia, Brazil, Peru and Argentina. GeoPark Ltd (NYSE:GPRK) is currently ranked as the third largest private oil and gas operator in Colombia, the first private oil and gas producer in Chile, and owns a non-operating working interest in the largest non-associated producing gas field in Brazil.

GeoPark Ltd (NYSE:GPRK) released their Q4 2016 earnings report this evening. Q4 revenues were $60.3 million – up 32.8% YoY. That figure beat expectations by $2.2 million. However GPRK had a net loss of $26 million. Consolidated net revenues increased by 33% to $60.3 million in Q4 2016, compared to $45.4 million in Q4 2015. Their consolidated 2P reserves increased by 14% in 2016 to 142.8 mmboe compared to 2015. The increase in reserves mainly results from new discoveries in the Llanos 34 Block (GeoPark operated with 45% WI) in Colombia. Consolidated oil and gas production increased 2% to 23,593 boepd in Q4 2016 compared to 23,062 boepd in Q4 2015. The increase was mainly attributed to higher production in Colombia (with six new wells put into production in 2016), partially offset by lower production in Chile and Brazil.

Despite a drop in sales from 2014 ($428.7 million) to 2015 ($209.7 million), GPRK shares have performed well over the past year – gaining over 128%. YTD, GeoPark Ltd (NYSE:GPRK) is up over 43%. Some analysts believe that GPRK is overbought and point to an RSI figure of 78+ as an indicator of such. However GPRK is still about 1% lower than its 52-week high.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Jones Energy Inc (NYSE:JONE) Provides Corporate Updates

Jones Energy Inc (NYSE:JONE)

Jones Energy Inc (NYSE:JONE) released an operations update, its 2016 year-end reserves, its initial capital budget, and guidance for 2017. The company reported that first Merge wells the HARDY 25-11-6 1WH and BENNETT 24-11-6 1WH both drilled magnificently with closes underway. It started drilling third well, the BELYEU 33-9-5 1WH. Also, it added almost 3,140 net acres to its Merge position to-date subsequent to the acquisition closing. As of now, the firm’s Merge position is almost 21,000 net acres.

Operational update

The initial capital budget for this year stands at $275 million, of which around $110 million will be focused on Merge drilling and closures. Production for FY2016 was 19.2 MBoe/d while oil production for 4Q2016 was 4.5 MBbl/d.  As per operational update, proved reserves at close of year stood at 105.2 MMBoe grounded on SEC pricing1 while proved oil reserves stood at 23.6 MMBbl. Also, proved reserves at the close of year 2016 came at 82.1 MMBoe in the Cleveland while it was 2.4 MMBoe in the Merge. The liquidity stood at almost $282 million as of close of December 2016.

The CEO speaks

Jonny Jones, the Chairman and CEO of Jones Energy, reported that 2016 was a remarkable year for their company, as they took major steps to enhance their balance sheet and bring down costs permitting them to restart their Cleveland drilling program. Moreover, the company reported the acquisition of almost 18,000 net acre area in the Merge, which is a leading operated site in the Eastern Anadarko Basin.

Jones Energy CEO reported that this development has transformed their opportunity set as well as their asset base. The Merge program started in 2016 with the preliminary rig arranged to the field drilling a 2-well pad. It is initial days, but the management is positive that additional upside from their acquisition assumptions have emerged with increased potential landing points noted, counterbalance operator density assessments and early-time outperformance from neighboring wells.

Strong report from offset operators and increased activity in the region additionally supports their beliefs that Merge is a leading U.S. onshore resource plays. Jones further added that last year they met and surpassed their goals, increasing production guidance by 7% and enhancing cost structure across the managed program.

The shares of Jones Energy reported that gained over 3% on Monday, and ended the session at $3.25. With the last reported gains, the market cap of firm now stands at $277.83 million.

3/07/2017
Ticker Symbol JONE
Last Price a/o 3:21 PM EST  $3.15
Average Volume  1.02M
Market Cap (mlns)  286.72M
Sales (mlns) 126.60M
Shares Outstanding (mlns) 88.22M
Share Float (mlns) 54.96M
Shortable Yes
Optionable Yes
Inside Ownership 1.70%
Short Float 28.93%
Short Interest Ratio 15.54
Quarterly Return -29.35%
YTD Return -35.00%
Year Return 28.46%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Pacific Ethanol, Inc. (NASD:PEIX) Beats Estimates but Market Sells

Pacific Ethanol, Inc. (NASD:PEIX)

Pacific Ethanol, Inc. (NASD:PEIX) gapped up on the open and gained 12% before pulling back into negative territory. Yesterday PEIX shares closed at $8.35 and this morning reached $9.35 based on a Q4 and 2016 full-year earnings report that beat analyst expectations. Trading has been around three times the average daily volume.

For Q4 2016, Pacific Ethanol, Inc. (NASD:PEIX) reported net income of $13.1 million – a YoY gain of 17%. Q4 2016 operating income was $18.8 million versus $0.5 million for the same period last year. Net income available to common stockholders was $12.6 million, or $0.30/share, compared to a net loss of $1.1 million, or $0.03/share in Q4 2015.

For the year 2016, net sales were $1,624.8 million, compared to $1,191.2 million in 2015. Gross profit was $51.8 million, compared to $7.4 million in 2015. Net income available to common stockholders was $0.1 million, or $0.00/share, compared to a 2015 net loss of $20.1 million, or $0.60/share.

Pacific Ethanol is a producer and marketer of low-carbon renewable fuels in the Western United States. Pacific Ethanol, Inc. (NASD:PEIX) owns eight ethanol production facilities, four in the Western states of California, Oregon, and Idaho, and four in the Midwestern states of Illinois and Nebraska. The plants have a combined production capacity of 515 million gallons per year, produce over 1 million tons per year of ethanol co-products such as wet and dry distiller grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, corn oil, distillers yeast, and CO2.

Ethanol could be considered an integral part of the country’s transportation fuel market, currently representing nearly 10% of the overall gasoline supply in the United States. Ethanol has many advantages as a component of our transportation fuels. It is made from domestically produced renewable resources and reduces air pollution and carbon dioxide. With its high octane rating, ethanol is claimed to add value to gasoline blends. Ethanol also helps consumers by increasing domestic fuel supplies and refining capacity.

Pacific Ethanol, Inc. (NASD:PEIX) sales have increased from $900 million in 2011 to $1.19 billion in 2015. EPS has been erratic. In 2011 PEIX shareholders experienced a positive EPS of $0.80 – and also in 2014 when the company posted a profit of $0.93 EPS. However there were EPS losses in 2012 (-$2.81), 2013 (-$0.17), and in 2015 (-$0.60). PEIX is currently trading down over 3% below yesterday’s close.

3/2/2017
Ticker Symbol PEIX
Last Price a/o 2:27 PM EST  $                      8.10
Average Volume                    568,000
Market Cap (mlns)  $                  358.13
Sales (mlns) $1,560.00
Shares Outstanding (mlns) 42.89
Share Float (mlns) 34.89
Shortable Yes
Optionable Yes
Inside Ownership 0.20%
Short Float 2.87%
Short Interest Ratio 1.77
Quarterly Return -1.18%
YTD Return -12.11%
Year Return 105.16%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

W&T Offshore Inc. (NYSE:WTI) Could be on the Launch Pad

W&T Offshore Inc. (NYSE:WTI)

W&T Offshore Inc. (NYSE:WTI) is up for the mast month after the independent oil and gas drilling company posted 4th quarter and 2016 results. WTI shares closed at $2.62 on Wednesday but have reached $3.08 in inter-day trading – a gain of over 17%. Volumes have already doubled yesterday’s total.

W&T Offshore Inc. (NYSE:WTI) total annual production was down 1.7 million barrels of oil equivalent (“MMBoe”) in Q4 2016 – down 9.9% from Q4 2015. The lower production was due to natural production declines, well performance, pipeline outages along with field and platform maintenance.  This under-performance was partially offset by new oil production from the development of certain deepwater fields. For the quarter, revenues were $115.2 million, 72% of which was from oil and NGLs, and were up $11.1 million compared to Q4 2015.

Houston, TX-based W&T Offshore, Inc. (NYSE:WTI) is an independent oil and natural gas producer. The company acquires, explores, and develops oil and natural gas fields in the Gulf of Mexico. W&T holds working interests in approximately 54 offshore fields in federal and state waters. W&T has reserves of 76.4 million barrels of oil equivalent.

For the year, W&T Offshore, Inc. (NYSE:WTI) was downgraded by three firms in 2016. WTI performance lags behind oil exploration and drilling ETFs such as $XOP and $IEO. $WTI is up 12%, while XOP is up 44%, and $IEO has gained 30%. It should be noted that the constituents in these ETFs are larger and have access to more favorable financing in an industry that relies heavily on its ability to manage cashflows against volatile pricing.

3/2/2017
Ticker Symbol WTI
Last Price a/o 1:15 PM EST  $                      3.01
Average Volume                2,320,000
Market Cap (mlns)  $                  367.51
Sales (mlns) $388.80
Shares Outstanding (mlns) 140.27
Share Float (mlns) 91.79
Shortable Yes
Optionable Yes
Inside Ownership 32.90%
Short Float 10.17%
Short Interest Ratio 4.02
Quarterly Return 63.75%
YTD Return -5.42%
Year Return 20.74%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

Seadrill LLC (NYSE:SDLP) Prospects Looking Dim

Seadrill LLC (NYSE:SDLP)

Seadrill LLC (NYSE:SDLP) might be filing for bankruptcy. Seadrill is a UK-based limited liability company formed by Seadrill Limited (NYSE:SDRL) to own, operate and acquire offshore drilling rigs. The company’s drilling rigs are under long-term contracts with major oil companies such as Chevron, Total, BP and ExxonMobil. Yearly performance looks good – up 47%. However that number needs to be put in the context that the previous year was when SDLP shares were hitting all-time lows. When the downturn in the -off-shore drilling sector began in 2014, SDLP was trading above $20.

Wall St. analysts projected Seadrill LLC (NYSE:SDLP) Q4 revenues at $353 million – actual was $353.3 million. It is a small win for the company but that figure still represents a 24% YoY drop. Operating income dropped about 20% from the previous quarter and operating expenses increased around 3% from the prior quarter. However deeper in their earnings announcement was what cause SDLP shares to plummet:

The short to medium term outlook for the offshore drilling market continues to be challenging… We continue to expect utilization to get worse before it gets better as more units become available than are required… Discussions continue with stakeholders and potential new money investors, however given the status of those discussions, Seadrill Limited has indicated that it will be challenging to finalize a fully consensual agreement before April 30, 2017. In the event a consensual restructuring agreement is not concluded or an agreement to an extension is not reached, Seadrill Limited is also preparing various contingency plans, including potential schemes of arrangement or chapter 11 proceedings.”

On the release of this ominous press release, Seadrill LLC (NYSE:SDLP) shares dropped over 20%. Given the political landscape and the expectation that barriers to oil drilling will be dropping off faster than they were enacted, it is not unrealistic to believe that energy prices will remain flat or lower. Seadrill LLC (NYSE:SDLP) would, in that case, probably need to review alternatives.

3/1/2017
Ticker Symbol SDLP
Last Price a/o 4:44 PM EST  $                      3.62
Average Volume                    807,630
Market Cap (mlns)  $                  329.06
Sales (mlns) $1,710.00
Shares Outstanding (mlns) 90.9
Share Float (mlns) 49
Shortable Yes
Optionable Yes
Inside Ownership 0.00%
Short Float 1.40%
Short Interest Ratio 0.85
Quarterly Return 9.02%
YTD Return -11.74%
Year Return 46.84%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Why Stone Energy Corp. (NYSE:SGY) Rocketed Today

Stone Energy Corp. (NYSE:SGY)

Stone Energy Corp. (NYSE:SGY) SGY shares closed Tuesday at $6.95 and opened today at $30.00 on the back of a 1-for-5.674558 reverse stock split. The shares quickly rose to $32.39 before retreating to the $27 handle. Prior to today’s price action, the independent oil and gas firm had not traded at these levels for about a year.

Yesterday Stone Energy Corp. (NYSE:SGY) announced that it had closed on its sale of its Appalachia properties to EQT Production Company for $527 million. The sale was forced by its plans to restructure itself and successfully come out of bankruptcy. Accordingly, yesterday the company also announced that it successfully completed the conditions precedent to emerging from chapter 11 reorganization. The reorganization includes pre-petition unsecured noteholders receiving common shares equivalent to 95% of the total outstanding shares. Pre-petition common shareholders are receiving 5% of the total outstanding shares. Additionally, the pre-petition stockholders are receiving warrants to purchase 3,529,412 new common shares, or approximately 3.529412 warrants for each 1 new common share.

The real news that sent shares skyrocketing was the release of the production report which revealed that Q4 production was about 12% better than Q3 production but a whopping 81% better than Q4 of the previous year. The market seems to have been surprised by the productivity yielded from the resumption of production at the company’s “Mary” field. Overall, Stone Energy Corp. (NYSE:SGY) reported Q4 revenues of $113 million which was about 2% better than analyst expectations.

This morning, Stone Energy Corp. (NYSE:SGY) shares were upgraded one level by both National Securities and Capital One. This follows a tough 2016 for the company when eight firms downgraded SGY shares. Prior to today, not a single analyst have the firm a rating better than “Hold”.

3/1/2017
Ticker Symbol SGY
Last Price a/o 12:30 PM EST  $                    27.83
Average Volume                1,390,000
Market Cap (mlns)  $                    37.25
Sales (mlns) $374.90
Shares Outstanding (mlns) 5.36
Share Float (mlns) 4.65
Shortable Yes
Optionable No
Inside Ownership 3.50%
Short Float 22.98%
Short Interest Ratio 0.77
Quarterly Return 63.92%
YTD Return -2.80%
Year Return -55.16%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Clean Energy Fuels Corp. (NASDAQ:CLNE) Deal with BP p.l.c. (NYSE:BP)

Clean Energy Fuels Corp. (NASDAQ:CLNE) 

Clean Energy Fuels Corp. (NASDAQ:CLNE) announced this morning that BP p.l.c. (NYSE:BP) will acquire the upstream portion of Clean Energy’s biomethane production business and sign a long-term supply contract to support Clean Energy’s continuing downstream renewable natural gas business. The deal enables both companies to accelerate the growth in renewable natural gas supply and meet the growing demand of the natural gas vehicle fuel market. 

The $155 million deal sent shares of Clean Energy Fuels Corp. (NASDAQ:CLNE) up over 30% in pre-market trading. The pre-market volume is indicating that total volumes for the shares should be very heavy for the trading day. Clean Energy shares have had its short interest drop about 1.6% recently. That could have been due to short covering as CLNE has dropped, prior to today, over 8% in the previous month.  

Clean Energy Fuels Corp. (NASDAQ:CLNE) is a provider of natural gas fuel for transportation in North America. The company builds and operates CNG and LNG vehicle fueling stations; manufacture CNG and LNG equipment and technologies; develop RNG production facilities; and deliver more CNG and LNG vehicle fuel than any other company in the U.S. Clean Energy also sells Redeem™ RNG fuel and the company boasts that it believes it is the cleanest transportation fuel commercially available, reducing greenhouse gas emissions by up to 70%. 

In 2011, Clean Energy Fuels Corp. (NASDAQ:CLNE) reported sales of $292.7 million and the sales growth has been over 12% despite a 10.4% drop from 2014 to 2015. EPS has been less bright. In 2011 the company lost $0.68 EPS. The following four years never saw a positive EPS number posted and in 2015 the company posted its worst EPS loss in the past five years – $1.47. Of the three firms that follow Clean Energy Fuels Corp. (NASDAQ:CLNE), two assign CLNE shares as a “Strong Buy” and one rates the shares as a “Hold”. 

3/1/2017
Ticker Symbol CLNE
Last Price a/o 9:17 AM EST  $                      3.14
Average Volume                1,630,000
Market Cap (mlns)  $                  344.67
Sales (mlns) $420.20
Shares Outstanding (mlns) 140.68
Share Float (mlns) 121.99
Shortable Yes
Optionable Yes
Inside Ownership 10.80%
Short Float 5.66%
Short Interest Ratio 4.24
Quarterly Return -33.60%
YTD Return -14.34%
Year Return -14.93%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

 About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

 

Maxwell Technologies, Inc. (NASDAQ:MXWL) Barely Moves Despite Earnings Announcement and Restructuring Plans

Maxwell Technologies, Inc. (NASDAQ:MXWL)

Maxwell Technologies, Inc. (NASDAQ:MXWL) reported, after the close of the market’s regular session, operational and financial results for the three months ended December 31, 2016. Results were generally in line with analyst expectations and MXWL shares barely moved in the after-market – down 1.57% to $5.00. Also announced with Q4 earnings were corporate actions which will likely have a large influence on future earnings.

Total revenues for Q4 2016 were $26.4 million, compared with $25.5 million for Q3 2016 and $49.8 million for the same quarter of the prior year. Net loss for Q4 2016 was $12.2 million, compared with a net loss of $6.9 million for Q3 2016 and a net loss of $2.2 million for the prior year quarter.

San Diego, CA-based Maxwell Technologies, Inc. (NASDAQ:MXWL) develops, manufactures, and markets energy storage and power delivery products globally. The company also provides radiation-hardened microelectronic products consisting of single board computers and components comprising high-density memory and data conversion modules for satellites and spacecraft applications.

Also announced today was the news that Maxwell Technologies, Inc. (NASDAQ:MXWL) will purchase the operating entities of Nesscap Energy, Inc., a developer and manufacturer of ultracapacitor products for use in transportation, renewable energy, industrial and consumer markets, for an aggregate purchase price of $23.175 million, payable in common shares that are subject to a 10% collar adjustment at close. Maxwell expects to benefit from synergies between the two companies that will accelerate revenue and earnings growth, increase the pace of innovation, and create a broader and more advanced product portfolio.

Maxwell Technologies, Inc. (NASDAQ:MXWL) also announced a global restructuring plan which includes a reduction-in-force as well as a consolidation of their manufacturing and supply chains. The company is, however, expanding in one area – the Chinese bus market. Maxwell expanded their agreement with CRRC Qingdao Sifang Rolling Stock Research Institute Co. Ltd. which localizes the manufacturing of ultracapacitor-based modules for use in the China-based bus market.  

2/28/2017
Ticker Symbol MXWL
Last Price a/o 7:53 PM EST  $                      5.00
Average Volume                    166,310
Market Cap (mlns)  $                  161.04
Sales (mlns) $144.70
Shares Outstanding (mlns) 31.7
Share Float (mlns) 31.14
Shortable Yes
Optionable Yes
Inside Ownership 0.70%
Short Float 6.13%
Short Interest Ratio 11.49
Quarterly Return -2.50%
YTD Return -0.78%
Year Return -11.34%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

 About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

 

Ideal Power Inc. (NASDAQ:IPWR) Releases Earnings and Announces New Raise

Ideal Power Inc. (NASDAQ:IPWR) 

Austin, TX-based Ideal Power Inc. (NASDAQ:IPWR) released Q4 2016 and full year results. Ideal Power lost $0.29/share in Q4 which was better than the analyst estimates of $0.29. However Q4 revenue missed badly – $371,000 vs. estimates of $1.4 million. For the year, the company reported that its loss widened to $11 million, or $1.15 per share. Revenue was reported as $1.6 million.  

Also announced yesterday was a definitive securities purchase agreement with various accredited investors, including all of Ideal Power’s executive officers and directors, to raise gross proceeds of approximately $15 million in a private placement of common stock and warrants to purchase common stock. In addition, Ideal Power Inc. (NASDAQ:IPWR) has agreed to sell to a group of affiliated investors whose purchase of common stock would have resulted in such investors beneficially owning more than 9.99% of the company’s outstanding common stock immediately following the offering, shares of the company’s newly designated Series A Convertible Preferred Stock in lieu of common stock. Each share of such preferred stock is convertible, subject to certain limitations, into one share of common stock. Each share of common stock or preferred stock, together with a warrant to purchase one share of common stock, is being sold at a per share price of $2.535. The warrants will have an exercise price of $2.41 per share, are non-exercisable for the first six months and will expire three years from the date of issuance. 

Ideal Power Inc. ( NASDAQ:IPWR ) is a technology company dedicated to advancing electric power conversion. The company has developed a novel, patented power conversion technology called Power Packet Switching Architecture™ (PPSA™). PPSA™ improves the size, cost, efficiency, flexibility and reliability of electronic power converters. PPSA™ can scale across several large and growing markets, including solar PV, variable frequency drives, battery energy storage, mobile power and microgrids, and electric vehicle fast charging. Ideal Power Inc. ( NASDAQ:IPWR ) is also developing and has patented a bi-directional, bi-polar junction transistor (B-TRAN™) which has the potential to dramatically increase bi-directional power switching efficiency and power density. Ideal Power employs a capital-efficient business model which enables the company to address several product development projects and markets simultaneously. 

2/28/2017
Ticker Symbol IPWR
Last Price a/o 4:01 AM EST  $                      2.85
Average Volume                      51,000
Market Cap (mlns)  $                    22.92
Sales (mlns) $2.20
Shares Outstanding (mlns) 9.55
Share Float (mlns) 8.13
Shortable Yes
Optionable No
Inside Ownership 17.14%
Short Float 3.78%
Short Interest Ratio 6.04
Quarterly Return -45.58%
YTD Return -27.27%
Year Return -51.61%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

 About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Is Chesapeake Energy Corporation (NYSE:CHK) Going Anywhere?

Chesapeake Energy Corporation (NYSE:CHK)

Chesapeake Energy Corporation (NYSE:CHK) posted largely feeble financial results for Q4 2016, which it reported on February 23. Revenue of $2.02 billion fell 24% from a year earlier quarter and also came short of the average revenue estimate of analysts polled by Reuters. Analysts were expecting the company to generate revenue of $2.08 billion for the quarter. The adjusted EPS of $0.07 that Chesapeake posted in Q4 2016 was in line with expectations.

Chesapeake’s results in the latest quarter were hurt by weaker prices and lower volumes. Unprofitable hedging also caused an adverse impact on the company’s earnings. Oil companies struggled with falling prices of the commodity for nearly two years amid a global supply glut. However, a landmark deal by the OPEC last year brought hope of price recovery in the oil market as members of the cartel agreed to cap their output. However, price recovery has been slow.

The nearly two years of downbeat oil prices not only impacted earnings at Chesapeake, but also left the company deep in the red. The company exited Q4 2016 with net long-term debt of more than $9.9 billion, offset by cash balance of $882 million.

What happens next?

While Chesapeake Energy Corporation (NYSE:CHK) fell short of providing clear assurance that 2017 would be a great year, the management provided several hints that the company is steadily regaining its footing and the coming years should be better. Though investors should be aware that any unexpected developments in the oil market that cause further and prolonged price declines could send the management of Chesapeake back to the drawing board.

As much as Chesapeake struggled with lower volumes and weak prices, it still managed to cut its operating expenses for Q4 2016 by 58.4% from a year earlier to $2.3 billion. That helped the company to narrow its GAAP net loss to $741 million from $2.23 billion a year earlier.

The management also addressed the issue of declining volumes, saying that it will try to reverse the trend starting in the back half of the year.

Production target

Chesapeake Energy Corporation (NYSE:CHK) hopes to produce between 532,000 and 562,000 barrels of oil equivalent per day (boepd) in 2017 despite narrowing its capital budget for the year as part of cost controls.

The management expects to cut the company’s debt by $2 – $3 billion over the next few years. Asset sales are expected to contribute toward the cost reduction.

Stock movement

Chesapeake Energy Corporation (NYSE:CHK)’s feeble quarterly earnings combined with concerns over the company’s huge debt sent the shares down nearly 2.9% to $5.75 in the last session. The stock is down more than 18% so far in 2016, but has gained more than 180% over the last 12 months.

2/23/2017
Ticker Symbol CHK
Last Price a/o, 4:02PM EST  $                       5.75
Average Volume (mlns) 44.58
Market Cap (blns)  $                  5.09
Sales (mlns) $9.93
Shares Outstanding (mlns) 884.48
Share Float (mlns) 878.95
Shortable Yes
Optionable Yes
Inside Ownership 1.00%
Short Float 12.67%
Short Interest Ratio 2.50
Quarterly Return -9.59%
YTD Return -18.09%
Year Return 113.75%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.