Here's an article about Chesapeake
Energy's attempt to help build a
natural gas highway:
Chesapeake Energy
Offers Hope for Improvement
in Natural Gas Prices
The article is dated August 5, 2011 and it is
by Devon Shire. Devon has his own blog which is
found here:
Canadian Value Investing
The above article has several interesting
things to say about Chesapeake Energy:
One thing is says is that the price of
Chesapeake has been quite volatile. According
to the article, the price of Chesapeake was
close to 60 dollars a share in 2008.
Soon after, the share price collapsed and
hit levels below 12 dollars a share. The
Collapse was due to the price of natural
gas collapsing according to this article.
The article seems to be saying that when
the price of natural gas collapses, the
share price of Chesapeake collapses. This
makes sense.
The author of the article seems to think
that if the price of natural gas goes to
7 dollars for one million BTUs (mm/btu)
then the price of Chesapeake will soar.
One thing seems certain. The price of
natural gas has been highly volatile in
the past. Wikipedia has an article on
natural gas prices that includes a nice
chart of prices for the the decade
2000-2010:
Natural Gas Prices
Looking at the chart, I see that natural
gas prices have been as low as 2 dollars
per mm/btu and as high as 14 dollars per
mm/btu.
It's clear to me that natural gas prices
have fluctuated quite significantly in
the last decade.
Note that I'm not an expert on natural
gas prices or on Chesapeake Energy. I
learn as I go and I write as I learn.
I have invested in Chesapeake Energy
in the past, am currently invested in
them, and will probably invest in them
in the future.
However, that does not mean you should
do so. One of my biggest regrets is
not researching stocks more carefully
before investing.
I've made that mistake over and over
again. It seems that you can never
be careful enough or patient enough.
Ed Abbott
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