Chesapeake

Carl Icahn has filed a 13D with the SEC, which shows that he has boosted his stake in Chesapeake Energy Corporation (NYSE:CHK). Carl Icahn previously owned 7.96% of the Oklahoma City, based company, he now owns 8.98% of outstanding shares. Carl Icahn owns a total of 59,698,689 shares of the natural gas company.

Famous for his activism, Carl Icahn is likely gearing up for a proxy war with management. Icahn has not filed any documents demanding a change on the board of directors or with management, but it would not be surprising if he did so soon. The CEO of Chesapeake Energy, Aubrey McClendon, has been criticized for misuse of shareholder money, and even running a hedge fund on the side. Many large shareholders have already been calling for a shake-up of management, McClendon stepped down as Chairman as a result, but kept the CEO position. Icahn is the largest shareholder of the company after Mason Hawkins’ Southeastern Asset Management.

The stock of the company has been under pressure due in part to the decrease in natural gas prices. Shares of Chesapeake Energy closed yesterday at $17.47 a share, down from the high of close to $70 reached in mid-2008.

Chesapeake Energy Corporation (NYSE:CHK) is trying to sell assets in an effort to raise further cash for the company. As part of its plan to sell $17-19 billion of assets over the course 2012-2013, Chesapeake Energy Corporation (NYSE:CHK) has now added an Eagle Ford package to the chopping block. This is in addition to a JV in the Mississippi Lime (2 million net acres), which management noted it is not opposed to selling 100% outright.

Debt is another concern for Chesapeake Energy Corporation (NYSE:CHK). Chesapeake recently took another term loan in the amount of $2 billion to pay down the remainder of its original $4 billion term loan along with its credit facility and other senior notes. During the quarter, long-term debt increased to ~$15.8 billion from $14.3 billion last quarter and $10.6 billion at the start of the year.

For the nine months ended 30 September 2012, Chesapeake Energy Corporation (NYSE:CHK) revenues decreased 1% to $8.78B. Net loss applicable to common stockholders totaled $1.2B vs. income of $1.14B. Revenues reflect Exploration and Production segment decrease of 1% to $4.62B. Net loss reflects Impairment of natural gas and oil proper increase from $0K to $3.32B (expense), Natural gas and oil depreciation, deplet increase of 62% to $1.86B (expense).

Disclosure: No position