Why Chesapeake Energy (CHK) Shares Are Falling Today

NEW YORK (TheStreet) -- Chesapeake Energy (CHK) was falling 1.4% to $24.89 Wednesday on news that its Sahara natural gas field in Oklahoma is producing less than expected, threatening $880 million loans and notes from Barclays.

According to Bloomberg, output from Chespeake's well in the Sahara field was 12% below what the company projected in the six months ending February 2014. Because of the smaller-than-expected output the production coverage ratio of the company's Glenn Pool Oil & Gas Trust five-year loan and 10-year notes fell to 1.18 from 1.29.

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TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHESAPEAKE ENERGY CORP (CHK) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk."

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