Stocks

Icahn Boosts Stake In Chesapeake Energy (CHK)

Activist investor, Carl Icahn and his affiliates increased their stake in Chesapeake Energy (CHK) based on their latest 13D filing with the Securities and Exchange Commission on Monday.

Icahn Boosts Stake In Chesapeake Energy (CHK)

Details of Icahn’s investment

The filing showed that Icahn and his affiliates collectively own total of 73,050,000 shares or 10.98% of the outstanding stock of Chesapeake Energy as of February 9, 2015.  Their investment in the energy company is worth approximately $1.152 billion.

High River LP, Icahn Partners LP and Icahn Partners Master Fund LP acquired more shares in Chesapeake Energy for $14.15 a piece on March 11, 2015.

High River purchased 1,320,000 shares; Icahn Partners bought 3,127,252 shares and Icahn Partners Master Fund purchased 2,152,748 shares of Chesapeake Energy.

Based on the filing, High River has sole voting power and sole dispositive power concerning 14,610,002 shares of Chesapeake Energy. Mr. Icahn and each of Barberry and Hopper have shared voting power and dispositive power to those shares.

Icahn Master has sole voting power and sole dispositive power concerning 23,754,055 Shares. Icahn and each of Beckton, Icahn Capital, Icahn Enterprises GP, Icahn Enterprises Holdings, Icahn Offshore, and IPH has shared voting and shared dispositive powers to those shares.

Icahn Partners has sole voting power and sole dispositive power concerning 34,685,943 Shares. Mr. Icahn and each of Beckton, Icahn Onshore, Icahn Capital, Icahn Enterprises Holdings, Icahn Enterprises GP and IPH has shared voting power and shared dispositive power concerning such Shares.

Chesapeake Energy stock performance

Chesapeake Energy closed $14.11 per share, up by 3.67%. The stock price of the energy company increased further by 3.40% to $14.69 per share after-hours on Monday.

Over the past 52 weeks, the shares of Chesapeake Energy traded between $13.38 and $31.49 per share. The company lost more than 42% in stock value over the past year.

Icahn Investment/Chesapeake Energy
Source: Google Finance

 

Last month, Chesapeake Energy reported earnings for the fourth quarter that missed the consensus estimate of Wall Street analysts. The energy company also indicated that it would reduce the number of its operating drilling rigs from 45 to 35 this year. It is the lowest number of active rigs since 2004, and a 38% decline from its 64 active rigs in 2014.

As a result, the stock price of the company tanked 10%.  Chesapeake Energy is one of the companies, which was negatively impacted by the decline of crude oil prices.

Chesapeake Energy (CHK) announced it is reducing its 2015 budget by $500 million to $3.5-4.0 billion, which now reflects a 35% decrease YoY (excluding acquisitions). Management indicated by that for 2015 operations are expected to be free-cash-flow neutral with approximately $6 billion of financial liquidity (cash + $4B revolver capacity).