Chesapeake Energy CHK Message Board

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Gold/Mining/Energy : Chesapeake Energy CHK

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To: Gabor who wrote (445)	12/5/1998 1:58:00 PM
From: Ed Ajootian	Read Replies (1) of 726

Gabor, Thanks for the thoughts. I'm looking at both the preferred and the common at this time. Obviously the common has more upside. And its hard to see the common going much lower than 1 x current cash flow. Am I missing something here, or did they really generate $28 mm in cash flow from operations last quarter (before working capital changes)? I get that by taking the $8 mm loss and adding back $36 mm in DD&A. $28 mm a quarter works out to $1.15 /share of annual cash flow. I'm amazed that they haven't found a major oil company to buy them yet. This would be an easy, quick way for an oil company to buy a whole mess of gas reserves at a price that would not be dilutive. A lot of companies are trading at about 4 x cash flow these days. So Buyer can give stock worth twice the current price of CHK and still be paying only a little over 2 x cash flow. Maybe Aubrey is holding out for more than a couple of bucks though.

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