CHK: CHK - TOP 5 GROWTH STOCK

Chesapeake Energy Corporation is an oil and natural gas production and exploration company that works to develop properties for the production of crude oil and natural gas from underground reservoirs. They have company properties all over the United States. It had 9.0 trillion cubic feet equivalent of proved reserves and own interests in an estimated 34,600 producing oil and natural gas wells as of December 31, 2006. Chesapeake Energy Corp has been recognized as one of the top 5 growth stocks of the week. The company generated adjusted net income for common shareholders of $330 million. In addition, daily production in millions of cubic feet equivalent increased 27% from September 2006. According to Chesapeake CEO Aubrey McClendon, the company has increased their growth expectation for future years. They are now anticipating 21% to 23% production growth in 2007 and 18% to 22% in 2008, and they have reaffirmed our 2009 production forecast of 12% to 16%. It might just have been our best operational quarter ever. Not only was their production up 27% on a year-over-year basis, but it was also up 8% on a sequential basis. That's a compound annual growth rate of 34%. If you combine last quarter's 9% sequential growth with this quarter's 8%, you can see that our half-year growth number is 17%. He plans to achieve these growth numbers while being cash flow positive and without taking on any critical commodity price or operational risks. Chesapeake's net production increased by an astonishing 43% on a sequential basis. That means during the quarter, they added 100 million cubic feet per day of net production. This would have been about 160 million per day on a gross basis. They are responsible for six-tenths of a bcfe of increased gas production in the U.S. on an annualized basis in just one company in just one play, using just 25% of their cash flow. The trend of analyst recommendations has been towards the buying and outperformance of the stock. Prices per share have been climbing since September, a rise of about $10 per share, and CHK has an incredible PEG ratio of 0.56. Chesapeake, which is bearing down on the top spot among U.S. natural-gas producers and displays an atypically solid management team, clearly stands to benefit and is a smart investment decision.