Chesapeake Energy Corporation

Decision Points

Chesapeake Energy Corporation (Chesapeake) is a producer of natural gas in the United States. It owns interests in approximately 44,100 producing natural gas and oil wells that are producing approximately 2.4 billion cubic feet equivalent (bcfe), per day, 93% of which is natural gas. The Company is focused on discovering, acquiring and developing conventional and unconventional natural gas reserves onshore in the United States. It also has operations in the Granite Wash Plays of western Oklahoma and the Texas Panhandle regions, and in the Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States.

Chesapeake Energy has P/E ratio 16.45, Indicated annual dividend 0.3, Betta coefficient 1.16, Earning per share 1.42 and share outstanding 653.915.00.

On Friday December 17,2010 ago, Billionaire activist investor Carl Icahn has built up a 5.8% stake in Chesapeake Energy Corp. (CHK), according to a filing to the Securities and Exchange Commission.

The filing said Icahn believes the shares are undervalued and he has already had talks with management about the business and how to maximize shareholder value.

Icahn said in the filing that he has spent $945.9 million on the more than 38.6 million shares he owns.

The Oklahoma City oil and gas producer's stock has fallen 10% thus far in 2010 through the close, while the broader market has gained by about that percentage. In after-hours trading, shares were up 0.9% at $23.50.

Icahn began buying Chesapeake stock during the first quarter of 2010, said Jeff Mobley, Chesapeake's senior vice president for investor relations and research.

One of the country's most well known activist investors, Icahn is already embroiled in a drawn-out hostile takeover effort at Lions Gate Entertainment Corp.'s (LGF) for most of this year.

Chesapeake has posted improved results recently as commodity prices improved from last year. Prices had plunged as demand dropped in the sputtering economy while supply grew as companies tapped into vast oil-and-gas-bearing underground shale formations in the U.S.

The company, known for its aggressive land acquisitions, is the second-largest producer of natural gas in the U.S. and has proved reserves of about 17 trillion feet of the commodity. This fall, Chief Executive Aubrey McClendon said Chesapeake will divert spending from natural-gas projects into more lucrative oil-exploration and output, ultimately aiming to become a top U.S. oil producer.

"We have met with Carl on several occasions, including as recently as Friday afternoon, and are pleased to welcome him as one of our largest shareholders," Mobley said Friday. " We believe his investment is evidence of his appreciation for our asset quality and for the strategic direction of the company, in particular our recently updated 2011 strategic plan, which features strong growth in oil production, best-in-industry hedging, significant asset monetizations and reduced leasehold spending."