China's CNOOC Makes Investment in U.S. Shales
Chesapeake will receive $2.16 billion in return for the stake, as CNOOC moves to acquire assets to help drive China's rapidly growing economy. CNOOC Ltd. CEO Yang Hua said that "The cooperation with Chesapeake in shale oil and natural gas is consistent with our value-driven overseas development strategy.
The execution of this project will benefit CNOOC Limited's long term production and reserves growth and should produce considerable returns for our shareholders." Chesapeake CEO Aubrey K. McClendon commented, "This transaction will provide the capital necessary to accelerate drilling of this large domestic oil and natural gas resource, resulting in a reduction of our country’s oil imports over time, the creation of thousands of high-paying jobs in the U.S. and in the payment of very significant local, state and federal taxes."
Chesapeake Energy shares rose $1.54, or +6.7%, in premarket trading Monday. The Bottom Line We had removed shares of CHK from our “recommended” list on Aug.4,2008 when the stock was trading at $45.25. The company has a 1.30% dividend yield, based on Friday's closing stock price of $23.05. The stock has technical support in the $20 price area. If the shares can firm up, we see overhead resistance around the $25-$26 price levels. We would remain on the sidelines for now. Chesapeake is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.