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Gold/Mining/Energy : Big Dog's Boom Boom Room

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From: - with a K	9/27/2006 10:33:40 PM
	of 206084

I put one foot in water with a CHK buy today. I like the management and the successful hedging strategy. The price of nat gas falling further seems unlikely, or at least there should be more upside than downside. The news today about the shut-in should help lower operating expenses for next year, helping comparisons. Maybe it will even help stabilize the price of nat gas, but who knows? Worth reposting: So far this year through August 31, we have realized approximately $740 million in cash gains from our natural gas hedges and, as of yesterday's market close, the mark-to-market gain on our remaining 2006 natural gas hedges was approximately $460 million. In the second half of 2006, we have hedged approximately 92% of our anticipated natural gas production at an average NYMEX price of $9.24 per mmbtu. In addition, we have hedged approximately 80% of our anticipated 2007 natural gas production at an average NYMEX price of $9.92 per mmbtu and approximately 60% of our anticipated 2008 natural gas production at an average NYMEX price of $9.44 per mmbtu. We currently have a mark-to-market gain of approximately $2.2 billion on our open natural gas hedges. A 2-year weekly chart shows I'm at mulitple levels of support, going back to Nov. 05. Note the PE low of 2 years: Chopping Yahoo's growth estimate from 11.4% to 6% I get a compelling value IMO: Company: CHK Date: 9/27/06 Next year's expected earnings: $3.48 EPS growth rate used for estimate: 6% Multiple Graham used for estimate: 8.5 Graham Fair Value: $50.22 Current Price: $28.90 $ difference: $21.32 Percent Growth to Fair Value: 73.78% finance.yahoo.com

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