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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ken W who wrote (23072)	12/22/2000 8:34:48 PM
From: JoeinIowa	Respond to of 29382

Ken, I don't worry about the Oil from CHK as they have hedged most of it for the next year. "To reduce the impact of volatile oil and gas prices, Chesapeake has hedged approximately 27% of its projected 2001 gas production at an average NYMEX price of $5.00. In addition, the company has entered into collar arrangements for 14% of its gas production with an average floor price of $4.00 and an average ceiling price of $6.08 per mcf. Chesapeake has also hedged 63% of its anticipated 2001 oil production at an average NYMEX price of $29.72 per barrel." They should earn a minimum of $1.50(assumes $5 NG)and the upside is probably 3 times that. Use a PE ratio of 10 and I say they should hit 15 in the next few months. Of course if the price of NG starts to drop there will be a psychological problem with them going up. I think they can get by that if the analysts start upping the estimates for the next quarter/year. Joe