Wunderlich Securities raised its price target and reiterated its buy rating for the shares of Chesapeake Energy Corporation (NYSE:CHK) citing that the newly appointed chief executive officer of the company is ready to execute new strategy. Its new price target for the stock is $30, up from $25 per share.
Chesapeake Named Robert Douglas Lawler As Its New CEO:
Chesapeake Energy Corporation (NYSE:CHK) named Robert Douglas Lawler as its new CEO effective June 17. Lawler is a petroleum engineer with 25 years of experience in the energy industry. Before accepting his role to lead the second largest oil and natural gas producer in the United States, Lawler served as senior vice president of Anadarko Petroleum Corporation (NYSE:APC).
Wunderlich Securities analyst, Jason Wangler cited that Lawler’s leadership in the development of the Eagle Ford, Marcellus, Hayesville, and Permian assets is the most interesting part of his tenure at Anadarko Petroleum Corporation (NYSE:APC) because Chesapeake Energy Corporation (NYSE:CHK) is focused on those regions.
Wangler said that under Lawler’s leadership, Chesapeake Energy Corporation (NYSE:CHK) will remain focused on liquids within its core business. He cited that the company’s largest spending areas this year will be in Eagle Ford, Greater Anadarco Basin (Mid-Continent), Utica, and Marcellus plays to take advantage its most economic regions.
Chesapeake Energy’s Operations And Strategy:
The analyst cited that those regions has strong acreage positions and with abundant well results. According to Wangler, Lawler’s experience in developing those regions will help improve Chesapeake’s operations and strategy going forward.
In addition, Wangler projected that Chesapeake Energy Corporation (NYSE:CHK)’s production is Utica will increase five times from 65mmcfe to 330mmcfe per day by the end of the year.
Furthermore, he anticipated that the company’s asset sales in the first half of the year will help finance its funding gap and reduce debt. Chesapeake Energy Corporation (NYSE:CHK) already closed $2.3 billion out of the expected $4 billion to $7 billion expected assets sales this year. The company is also expected to announce the sale of its Northern Eagle Ford assets over the next few months.
Wangler wrote, With permanent leadership in place, strategic plan to grow production/reserves while reducing debt and an improving liquids cut (up to 24% in 1Q13) that should only grow further, we like the prospects of Chesapeake Energy Corporation (NYSE:CHK) going forward as it maximizes value from its significant asset base.”