Replies to This Discussion

Permalink Reply by insomniacnla on November 30, 2008 at 10:13

Groovy Grove,

I think that Mr. Spot is an alarmist who is no more knowledgeable on this issue than the rest of us. Most everyone on this site has heard rumors about Chesapeake's finances for several weeks now and Mr. Spot must just now be catching on. Kind of like the story of Chicken Little and the sky is falling.

In my opinion, you may be in a better position than others to receive your bonus monies. As other members have pointed out in your other discussion, your section is almost ALL under lease and you appear to be in the "sweet spot" of the Haynesville. There are several members, as well as myself, who wish you the best and that you have a good outcome with your lease. But, you probably won't know what will happen until it happens. LOL

BTW, you can send an email to the owner of this website, Haynesville, if you wish to complain about Mr. Spot's use of your username in the title of his discussion. Haynesville is more than understanding when it comes to these issues of posts like Mr. Spot's.

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Permalink Reply by jack spot on November 30, 2008 at 10:13

yes, i know that chesapeake is not paying any of the brokers. is that whom you lease is through a broker for chesapeake? GROOVY GROVE DO NOT BE A SUCKER!!!!!!!!!!!!!!!!!!!!! chesaepeake has not paid alot of landowners, so why would they pay you??????????? they are broke. all these people are telling you good luck , but the fact is that they are getting your hopes up only for you to be let down. i tell you straight up what i think and i bet that you do not get paid. there were people on the news that said they had signed contracts and a draft and they still did not pay it. SO, WHY BE A SUCKER? WHY DO YOU THINK THEY WILL PAY YOU BECAUSE THERE ARE THOUSANDS THAT THEY HAVE NOT PAID!!!! use your head man look at the facts!!!!!!!!!!!!!!!! why would they pay you and no one else? sorry but i like to be truthfull to people!!!!!!!!!!!

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Permalink Reply by jack spot on November 30, 2008 at 10:44

i was just trying to prepare groovy grove, not hurt his feelings. sorry groovy grove! but, like i said why would they pay groovy grave when others have not been paid? this is all my opinion! i am not trying to hurt anyones feeling. just be cautious groovy grave! and if you do get it i will be the first to congrats you!!

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Permalink Reply by Grice on November 30, 2008 at 10:33

Jack, you have repeatedly stated that Chesapeake is broke. I would appreciate it if you could provide Chesapeake's current financial statement, so the rest of the class can get on the same page as you.

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Permalink Reply by sesport on November 30, 2008 at 11:05

I found this as per your request. It might be something you've already read.

http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symb...

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Permalink Reply by jack spot on November 30, 2008 at 11:14

they you go sesport

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Permalink Reply by sesport on November 30, 2008 at 11:19

Grice - I'm not an accounting person, just plain everyday kind, but when I see this kind of red ink, it worries me. Maybe you could clarify.

http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?S...

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Permalink Reply by jack spot on November 30, 2008 at 11:41

yes please spell it out for all of us please

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Permalink Reply by Grice on November 30, 2008 at 12:11

I was hoping you would be able to "spell it out for all of us", since you were the one making the claims that they are broke. I am barely able to count past ten, twenty if I remove my shoes.

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Permalink Reply by Grice on November 30, 2008 at 12:09

First, I am not an accountant either. Second, you are viewing last years annual results. Third, click on "interim" for a more current (2008 / Q3) report. Fourth, they had a gain in operating and financing, but a loss in investments. This would not be uncommon, due to the recent crash of the stock market. However, even with the investment loss, they had an overall gain at the end of Q3.

Like I stated, I am not an accountant either. So if this is incorrect, I hope someone would be willing to correct my errors.

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Permalink Reply by sesport on November 30, 2008 at 14:43

Thanks, I looked at that. Q3 for '08 was the only gain. Q3 &Q4 of '07 were in the red, too. I believe they broke even in Q1 for '08, back in the red for Q2 of '08, and back in black for Q3 of '08 like you said. Wasn't that about the time they partnered up with ???? (can't remember right now) ?

Well, maybe we should all take this as a lesson to check out the financial health of these companies before signing with them.

Thanks for your input.

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Permalink Reply by Grillin' - MmmMmm on December 1, 2008 at 2:50

I think some of you need to understand the difference between cash accounting (or cashflow) and financial accounting. The links supplied showed CHK's results in financial accounting. This is very very different from day-to-day cash accounting. BTW, all of us in our day to day lives use cash accounting. Only businesses use financial accounting as mandated by the SEC. The differences are huge but too many to go into.

For CHK, the biggest difference between the two systems has to do with their hedge contracts on natural gas. In financial accounting, if you have a contract to sell gas at $9 but the current price is $12, then you have to show a LOSS of $3. Even though it only cost you $1 to produce said gas, it doesn't matter. Financial accounting assigns a "loss" due to the fact that you could have sold that gas for $13 but only sold it at $9.

Summary:
Cash Accounting: Revenue $9 minus cost $1 = op revenue of $8
Financial Acctg: Revenue $9 minus cost $1 minus hedge los $4 = op revenue of $4

That difference is what caused CHK to operate with negative financial earnings over those quarters. You will note that CHK is in the black when nat gas prices are LOWER than $9 and they operate in the RED when prices are higher than $9. Doesn't make much sense does it? Welcome to Financial Accounting...it just doesn't make much sense.

All of the above ignores Capital Expenditures which should be done with extreme caution! I'd suggest getting a copy of the news reports that followed each quarterly earnings announcement. Most financial websites include stories where they back out the effect of the hedge "losses" and show the operating results without these "made up losses".

Bottom line: does CHK have some issues? Yes! But are they going broke? Not if they slow down their drilling and leasing expenditures.

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