How Desperate is Chesapeake to Generate Cash Flow?
Chesapeake Energy finds itself losing money on Marcellus shale acreage sales |
From Seeking Alpha:
Read more, including details of how much less Chesapeake is getting for acreage in its recent deals, by clicking here.I know all acreage isn't created equally, but to go from over $5,000 per acre to $500 per acre is pretty astonishing. For people who were using a valuation model that incorporated a "per acre" sum of the parts approach, Chesapeake is quickly looking a lot less appealing.I know I was certainly guilty of looking at Chesapeake on a per acre basis. Back when McClendon was getting joint venture deals done that valuation approach seemed appropriate. All of the Joint Ventures back then supported the per acre values.I don't know if the industry has changed the way it values these resource plays, if the acreage Chesapeake is selling now is the worst of the lot or if Chesapeake is just that desperate.It is likely a combination of the three.
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