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Subject:  Re: FKA: CHK Date:  1/3/2013  3:38 PM
Author:  mungofitch Number:  13076 of 16864

Jim/ others, where do you value CHK?

If it's insanely run and NG prices stay low, current prices.
If it's merely badly run the way most firms are, $25-$30ish. Central scenario,
as I expect their leverage issues to be worked off and positive cash flow soonish.
If it's reasonably well run (e.g., keeping promises to switch to exploiting the existing assets), $45.
If it's well run and natural gas prices rise to the relatively sustainable
marginal cost for new production, up to $60. They have a lot of assets.

But this kind of thing really requires much deeper analysis than I'm capable of.
I'm relying on analysis by some other parties, which is a bad idea.
It fits into one's portfolio only if you're looking for something that is
a big bet on NG price recovery with a huge amount of potential upside.
Or if you're using it as a small piece of a diversified put writing
portfolio, which is what I'm doing. I don't need the stock price to
rise to do well, I need little more than that they stay in business
and that the stock price stabilize at some point.
Ideal for me is if the stock price stabilizes long before the market's worries evaporate.

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