Argus Research took a dim view of the outlook for Chesapeake Energy , specifically, based on the weak natural gas pricing environment. As TheStreet noted earlier this year, Chesapeake sold off all of its natural gas hedges at the end of 2011, and said it believed nat gas pricing had reached a bottom. Chesapeake left itself exposed to the whims of the spot market, and the direction has been straight down in spot market prices since it removed all of its nat gas hedges.

Argus Research analyst Phil Weiss, who has a sell rating on Chesapeake, lowered his earnings outlook for 2012 to $1.81 from $2.50 a share based on natural gas market pricing. While natural gas pricing has continued to fall this year -- it was a dog in 2011 -- the real red flag in the Argus report was a warning that Chesapeake may have to write-off natural gas assets in its fourth-quarter 2011 report.

"Given that natural gas prices fell about 9% year-over-year in 2011, we also think it is possible that CHK will announce impairment charges against some of its natural gas assets when it reports 4Q11 earnings in February," Argus said.
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