Energy Business Review: Chesapeake’s DOWNGRADE Before Results, Noble BUYS The Falklands

Odessa in West Texas is enjoying an oil boom. Signs of the times include bonuses of $5,000 for truckers, new tracks and rail-yard facilities to handle the soaring traffic, plus additional hotels, houses and industrial parks. Apache Corp. (NYSE:APA) and Union Pacific Corporation (NYSE:UNP) are among companies benefitting from the surge, along with the state’s tax revenue rising by 14 percent to $36.4 billion through June.

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Chesapeake Energy Corporation (NYSE:CHK) is said by BMO Capital to be “a story still chock-full of operating and financial risk, and one where the turnaround appeal is fading.” The analyst thus downgraded the company on Monday to Market Perform, ahead of its second quarter results. Shares perked up after hours, however, as revenue of $3.39 billion rose 2.1 percent year-over-year and beat by $7 million. Earnings of 6 cents missed by 3 cents, but daily production averaged 3.808 billion cubic feet of natural gas equivalent, which was up 25 percent year-over-year and up 4 percent quarter-over-quarter.

Noble Energy, Inc. (NYSE:NBL) will acquire a 35 percent investment in most of the Falkland Islands licenses of Falkland Oil & Gas (FLKOF.PK) for cash, plus funding from for certain future drilling and exploration costs. Falkland calculates it will obtain between $180 million and $230 million in total investment from Noble over the next three years in the area, which is thought to contain as much as 6.2 barrels of oil. Perhaps this is why Argentina does not give up on its claim to Las Malvinas?

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