Just When You Think You’ve Got A Winner
June 26th, 2006 by Grant in: InvestingLast week I mentioned that I bought some Chesapeake stock just as the summer started heating up and hurricanes were dialing in on their targets for the season.
It looked like I was on to something last Friday after CHK gapped up (chart) and closed $1.50 in the green.
But today CHK released news that they are issuing more shares to pay for a Barnett Shale acquisition, pay off debt, and for general corporate purposes.
ARHG! I’d like to think that Chesapeake has the best interest of stockholders in mind, but every time they issue shares to pay off debt, I take a step back. In a time of high oil and gas prices, why are they issuing stock to pay off debt and fund acquisitions?
In other oil and gas news, it appears that speculation on Iran is still holding oil at $70/bbl, and China is working on developing their own strategic oil reserve which puts them in competition for imports with the United States.
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