The Street - Energy

NEW YORK (TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 108 U.S. common stocks for week ending May 11, 2012. 38 stocks were upgraded and 70 stocks were downgraded by our stock model.

Rating Change #10 ...

Click to research the Financial Services industry.

NEW YORK (TheStreet) -- Chesapeake Energy expects Carl Icahn to disclose he has taken a significant stake in the company, according to a published media report.

The report, published on The Wall Street Journal's Web site, cited anonymous sources familiar with the matter.

A representative for Icahn declined to comment Sunday, the report said. ...

Click to research the Energy industry.

By Michelle Chapman

NEW YORK -- Chesapeake Energy Corp. has received a $3 billion loan from Goldman Sachs and Jefferies Group, giving the company more time to sell assets and lower its debt.

Chesapeake has been aggressively selling oil and gas assets, but its stock tumbled Friday after the company suggested that some of its planned sales could be delayed. Investors, who worried about a cash crunch if any sales were delayed or halted, sent Chesapeake's stock down 13.8% to close at $14.81 on Friday. ...

Click to research the Energy industry.

(Chesapeake Energy story updated to reflect Chesapeake statement on Eagle Ford VPP asset monetization plan being unaltered, Argus Research and Sterne Agee analyst comments)

NEW YORK (TheStreet) -- The latest cause for Chesapeake Energy's share spiral can be summed up this way: the company is damned if they do (sell the assets it needs to sell) and damned if they don't.

It's a Catch-22 involving the way that exploration and production company debt covenants with banks are written at a time when the company needs to sell assets to close a big funding gap. ...

Click to research the Energy industry.

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Bullion Bulls Canada) -- For several years I have been touting silver's unique anti-microbial properties. Out of the nearly infinite list of technological/industrial applications for silver, it always seemed inevitable to me that this one use would ultimately become our single greatest need for the Metal of the Moon.

That suspicion could, in turn, be traced back to a single threat that has loomed ever larger, ever more menacing: superbugs. This is the colloquial name given to the bacterial monsters we have created through the reckless, excessive and simply idiotic manner in which our species has overused its single most important medicine: antibiotics. ...

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Lisa Springer

NEW YORK (StreetAuthority) -- Many of us grew up in a world where natural resources like water and oil were cheap and plentiful, but those days are long gone. In today's world, some natural resources (such as clean drinking water) are already stretched to the limit and becoming increasingly scarce. In fact, potable water is already a top concern of world leaders and is beginning to rival oil as an investment theme....

Click to research the Materials & Construction industry.

NEW YORK (TheStreet) -- Let's face it; these are not the best of times for companies that produce natural gas as well as oil. When natural gas prices dropped below $2 per thousand cubic feet (MCF), investors almost panicked.

We've heard stories that the industry is producing more natural gas then there are facilities in which to store it. Some claim that the disparity between demand and production is on the level of 3 billion cubic feet per day. Can demand suddenly take up that kind of slack?

Then there are the issues about the nation's second-largest producer of natural gas, Chesapeake Energy. They've been making mostly negative headline financial news almost daily, and this has done further damage to the natural gas story. It's Often Darkest Right before the Dawn ...

Click to research the Energy industry.

NEW YORK (TheStreet) -- Increasingly, a long U.S. Natural Gas ETF and/or short U.S. Oil ETF position is appearing attractive. I often trade both, along with their options.

Like all ETFs, UNG and USO have inescapable administration and transaction costs eating away at longer-term returns. With the use of options, I am able to mitigate risk and take advantage of time decay. When I position into UNG, I either sell covered calls or write put options. My risk is lower and my odds of success are greater.

...

Click to research the Financial Services industry.

BOSTON (TheStreet) -- Some think the country's biggest railroads will become victims of the natural gas industry's success, as power plants replace coal as their fuel of choice, but they're still chugging along.

Coal has historically made up just over 20% of the biggest railroads' volume and as much as a third of their revenue. The reasoning is that railroads will get sidetracked by utilities' shift to the much cheaper natural gas, which is now selling for roughly half what it was a year ago.

That train, indeed, has left the station, as last week the Energy Information Administration reported that coal consumption by power generators fell 19% in the fourth quarter from the previous three months and 9.4% from a year earlier. ...

Click to research the Transportation industry.

NEW YORK (TheStreet) -- When it comes to oil and gas, there aren't many rivals that can go toe-to-toe with Exxon Mobil. I will concede that as enamored as I have become with Halliburton, even it can't compete with the successful track record of Exxon Mobil, the world's second largest company behind only Apple. Yet through no fault of its own, the company often gets overlooked when discussing some of the top run operations on Wall Street and seemingly punished for what appears to be routine success -- something from which the company has become somewhat of a victim.

It goes without saying, that this is a tremendous problem to have. But while Exxon trades in-line with Halliburton from the standpoint of their respective multiples, the stock remains significantly discounted when compared to such names as Schlumberger. The concerns surrounding natural gas cannot be overstated, as with several of its peers and most notably Chesapeake Energy, Exxon has had to deal with adverse effects of not only slower production, but considerably weaker North American prices for natural gas -- an event that served to offset what was once perceived to be a benefit of higher oil process....

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NEW YORK (TheStreet) -- Warren Buffett once said, "When a management team with a reputation for brilliance tackles a business with a reputation for poor economics, it is the reputation of the business that remains intact." Sometimes, though, we are asked to judge the inverse case: a sound business under poor management. What part of its reputation survives?

Such is the case for natural gas and oil company Chesapeake Energy and its embattled CEO, Aubrey McClendon. As "questionable" as McClendon's recent decision-making has been, the fundamentals of the company remain solid.

...

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NEW YORK (TheStreet) -- Chesapeake Energy proved it isn't entirely deaf to shareholders' concerns and today announced it would appoint a new chairman of the board, replacing founder Aubrey McClendon. The only problem is that changing the chairman won't change the unhappy fundamentals at work. Chesapeake remains a natural gas company under pressure, and not one to own.

Founder, CEO and current Chairman Aubrey McClendon has come under fire as it was revealed he has racked up personal loans of up to $1.1 billion, secured by his stakes in thousands of wells Chesapeake has drilled under their very unique "Founders Well Participation Program." This program allowed McClendon to invest and own 2.5% of every well Chesapeake drills. With natural gas prices dropping and leverage increasing from breakneck drilling at the company over the past several years, McClendon has been forced to secure loans to pay for the development costs for his share of the wells -- but no one on the board apparently knew just how extensive these loans had become. The questions surrounding these loans and the possible conflict of interest for the CEO have brought the IRS and SEC sniffing around the company and have sent shares reeling in recent weeks. A program at Chesapeake Energy means every well Chesapeake drills can be invested in and 2.5% owned by founder, CEO and current Chairman Aubrey McClendon.

In response to the obvious loss of shareholder confidence, Chesapeake also announced it will end the FWPP early, although not until 2014. But questions remain and will remain about the program: Will McClendon be allowed to continue to invest for the next two years? And what about the huge stakes the CEO already owns? Will the board request or demand that McClendon divest himself of those stakes? It seems unlikely any real restraints will be put on the Chesapeake leader, and much of these moves are just window dressing in front of a quarterly report today that looks likely to disappoint. ...

Click to research the Energy industry.

By Paul Mladjenovic NEW YORK (Minyanville) -- In late 2008, when silver was massacred in the futures pit and saw its price fall from over $20 to under $10, I told my readers at that time that silver entered into a "reverse bubble." I know it sounds odd, but let me re-visit the concept.

As you know by now, a "bubble" is when an asset reaches an unsustainably high level due to artificially stimulated demand. In 2004, I wrote that housing was entering a historic bubble because government policies such as excessively (artificially) cheap credit inflated the price of real estate to nosebleed levels. The real estate mania was everywhere in 2004-2006 as buyers were going berserk.

At the time, I had done a seminar with my favorite real estate expert (David Corsi) entitled "Housing Bubble Profits" and detailed my bearish rationale for why I thought that housing was entering a dangerous phase and that real estate investors and speculators would get hammered. The bottom line is that when an asset (real estate, stocks, whatever) gets bid up to high levels artificially (a level way above its true market price), the next step will be a painful plunge. ...

NEW YORK (TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 84 U.S. common stocks for week ending April 27, 2012. 48 stocks were upgraded and 36 stocks were downgraded by our stock model.

Rating Change #10 ...

Click to research the Utilities industry.

NEW YORK (TheStreet) -- Jana Partners, a hedge fund with an activist investing bent, is betting on Marathon Petroleum to be a big payday in 2012.

Jana has been on the right end of several big investments, including the Monday announcement that Barnes & Noble is spinning off its Nook business in a major deal with Microsoft. Jana's bet on Marathon Petroleum specifically is interesting in light of another major Monday deal in the energy space, with the sale of Sunoco to Energy Transfer Partners for $5.3 billion.

David DiDomenico, a partner at Jana, said that the fund has targeted Marathon Petroleum because of the value in the company's logistics and midstream operations, which are hidden in its larger refining business. Before the ETP acquisition, Sunoco was in the process of exiting the refinery business to to focus on energy logistics and infrastructure. ...

Click to research the Energy industry.

NEW YORK (TheStreet) -- Energy Transfer Partners reached a deal to buy refiner Sunoco for $5.3 billion.

"This transaction, which will be immediately accretive, represents the next step in Energy Transfer Partners' transformation into a more diversified enterprise with an integrated and expanded footprint," said Chairman and CEO Kelcy Warren, in a statement Monday. "As we have said in the past year, our goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs, and refined products. With this transaction, we make a major move in that direction."

Sunoco shares are being valued at $50.13 under the cash-and-stock deal. Sunoco closed Friday at $40.92. ...

Click to research the Energy industry.

U.S. GDP Data was worse than expected (2.2% vs 2.6% expected & prior 3%). There's nothing good about this data unless you believe spring weather caught up with a warm winter. Is that the spin? Perhaps. Others might just return to the previous mantra from the past few years: "bad news is good, good news is better" cynically meaning the Fed will launch another round of QE. It's the belief by bulls that no matter the data the Fed has your back until its QE effect exhausts itself. Nevertheless the weaker GDP data confirms what we're seeing globally--economic contraction. ...

Click to research the Retail industry.

NEW YORK (TheStreet) -- Poor, misunderstood Chesapeake Energy CEO Aubrey McClendon. He's really the victim, isn't he, in the current controversy over his fiefdom otherwise known as a publicly traded company owned by shareholders.

One thing is likely: No matter what anyone else thinks -- including some of the biggest pension funds in the world that would like to see the Chesapeake CEO put on a leash -- McClendon probably thinks he is the one being unfairly targeted. ...

Click to research the Energy industry.

NEW YORK (TheStreet) -- It ain't easy being Exxon Mobil.

Whether it's the attacks from President Obama on Big Oil and its excessive profits, or the global warming lobby, it's tough for the biggest of the Big Oil companies to find any love among its gas guzzling public.

The stock market is supposed to be a different story, though. Sadly, it isn't. ...

Click to research the Energy industry.

Jobless Claims (388K vs 375K expected & prior revised higher 389K) allowed for a beat with (ahem) revisions. Pending Home Sales (4.1% vs 1% expected & prior at -.5%) is what bulls seized on shrugging off poor employment data. Bulls see claims data as just more of the same. But people are also losing their benefits with 700K expected to be out of luck by next month.  

Earnings continue to come in beating expectations which is typical frankly. With housing data stronger the charge higher was led by Homebuilders (ITB) and REITs (IYR) was still trending higher with hotels doing better. Tech (XLK) continued to build on Wednesday's gains. Consumer discretionary (XLY), retail (XRT), financials (XLF) and energy (XLE) also trended higher. ...

Click to research the Conglomerates industry.