Chesapeake Energy (NYSE: CHK ) has lost investors nearly 50% over the past two years, because of a combination of high debt expense and low natural gas prices. In the following video, energy analysts Joel South and Taylor Muckerman discuss what Chesapeake is doing to right the ship.
"They are trying to transition to a more balanced asset base between gas and liquids," Taylor says. Traditionally a natural gas player, historically low natural gas prices have been a major drag on the bottom line.
In addition, Chesapeake is shifting its focus to developing the "core of the core plays" that are giving the best returns, and it's selling off excess lease holds that the company isn't leveraging for development now. This is all part of a plan to reduce long-term debt to below $9.5 billion.
Factor in initiatives to balance capex and cash flow, and as Joel states, "There is no doubt that this is definitely a net asset value play."
Investing in producers such as Chesapeake Energy is just one of many different ways to play the energy sector, and our analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and it's poised to profit in a big way from it. To get the name and detailed analysis of this company that will prosper for years to come, check out our special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this company before the market does. Click here to access your report -- it's totally free.