There is some sort of cosmic justice (or injustice -- I'm not sure which) that on the same day that U.S. oil exports officially topped imports, Chesapeake Energy disclosed a "going concern" notice.
(h/t @russellgold for flagging the latter for me)
(h/t @russellgold for flagging the latter for me)
The two are not disconnected, obviously. The oil and (especially) gas boom that turned the U.S. into an exporter also drove down prices and undermined $CHK's debt-heavy business model.
But still. You can make a strong case that no single individual is more responsible for the U.S. energy revolution than Aubrey McClendon, Chesapeake's late founder.
Indeed, I made this case when he died in 2016:
Indeed, I made this case when he died in 2016:
Aubrey was talking about shale as a game-changer -- for prices, for geopolitics, for the trade balance -- at a time when even most people *in the shale business* weren't convinced it was more than a passing fad.
He was probably the only person in the oil business who, if you told him in 2009 that the U.S. would be a net exporter by 2019, wouldn't have laughed you out of the room.
Fracking would have happened without Aubrey, but I feel confident in saying the production boom would not have. (Whether that is a good thing or a bad thing, I leave to others to decide.)
Aubrey didn't develop the technology that allowed the shale boom. Chesapeake under him didn't discover most of the major fields. But he pioneered the business model that defined the early shale industry, which was in many ways just as important.
That business model: lease aggressively (no matter the cost), drill like crazy (regardless of prices), and borrow whatever it takes to pay for it all.
If that sounds a bit like the recent saga of WeWork ... well, Aubrey was in many ways just as fascinating a figure as Adam Neumann, down to the crazy governance issues. (I hope the ending turns out differently for Neumann, of course.)
The U.S. oil business has matured since the boom years. But the roots are still evident. Just today @IHSMarkit projected a slowdown in oil production due to "market discipline." I laughed, because Aubrey was forever promising capital discipline, then went back to drilling.
And of course Chesapeake itself never managed to move beyond the production-first/profits-second model that Aubrey pioneered. Hence yesterday's filing and today's sub-$1 share price.
Anyway, it's been nearly a decade since I've covered energy on a day-to-day basis, so I offer no particular insight into the state of the industry today. But couldn't help but mark the confluence of events. </thread>
