BANKRUPT?!

This popular shale company has run out of gas...‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  [Wealthy Retirement]( SPONSORED [Stock Legend: "This Is the Best Buying Moment in History"]( This stock guru bought Apple in 1996, Netflix in 2005 and Amazon in 2005 too. Now he says we are sitting on the ultimate buying opportunity. [Find out the details on the three stocks he is urging people to buy now.](  [MARKET TRENDS]( How Too Much of a Good Thing Killed an Energy Favorite Jody Chudley, Contributing Analyst, The Oxford Club [Jody Chudley] After a 30-year run, Chesapeake Energy has declared bankruptcy. Common shareholders are going to get nothing... or next to nothing. It is a sad demise for what was once one of the most exciting companies in the market. From the very start (and until the very end), Chesapeake had been the poster boy for the [natural-gas-from-shale revolution](... roaring out of the gate and whimpering to the finish. [Chart - Red Hat's 49% One-Day Rise After IBM Purchase Announcement]( [Click to see larger chart.]( Shale gas started with so much promise for growth, but it has turned into one of the worst stories of shareholder wealth destruction in history. I've watched Chesapeake and the shale boom closely from the very beginning, and there are lessons to be learned...  SPONSORED [Will This Ceramic Tile Transform Global Energy?]( [Ceramic Tile](  The lead investor behind Google and Amazon is pouring millions into this technology. [Get details on the IPO stock here.](   And They Call This Man "The Maestro"? The year was 2003, and [Alan Greenspan]( the man they called "the maestro" for his ability to maneuver monetary policy, was blessing us with his wisdom... (Yes, the same "maestro" who had just presided over the horrific [dot-com bubble]( and would later help create an even larger housing bubble...) In 2003, Mr. Greenspan was educating us on natural gas, a commodity he was certain the United States was desperately short on. Greenspan was so concerned about natural gas that he went before Congress to urge that the country immediately look into importing liquefied natural gas to avoid major shortages. He could not have been more wrong... As Greenspan was sounding the alarm on a shortage, entrepreneurs in the [American oil and gas business]( were cracking the code on a new source of natural gas that would unlock a massive wave of supply. By combining horizontal (sideways) drilling with multistage fracturing (fracking), natural gas producers figured out how to economically produce natural gas from shale rocks. The industry had always known that natural gas (and oil) were trapped inside of shale. The problem was that until horizontal drilling and fracking were combined, those hydrocarbons could not be produced profitably. With the code cracked on shale, the American drillers unleashed a torrent of natural gas production... [Chart - Red Hat's 49% One-Day Rise After IBM Purchase Announcement]( [Click to see larger chart.]( At the turn of the 21st century, the United States produced virtually no natural gas from shale. Last year, an astounding 25.28 trillion cubic feet of shale gas was produced in the country, representing 75% of the total natural gas that was produced. Instead of warning Congress that we were facing a natural gas shortage, Alan Greenspan should have been telling those representatives that the country would soon be swimming in the stuff... In the Commodities Business, You Can Definitely Be Too Successful From the start, Chesapeake Energy was unquestionably the leader of the pack in the shale gas charge. Led by charismatic CEO Aubrey McClendon (a story unto himself), Chesapeake accumulated more shale acreage than anyone else and ramped up production at an incredible pace. From 2000 to mid-2008, Chesapeake's share price rose more than 2,000%. A $10,000 investment in Chesapeake in 2000 was worth $226,000 in July 2008. But remember how I said that we had always known that natural gas was trapped inside of shale, but we just couldn't profitably get it out? Well, funded by hundreds of billions of dollars of debt and equity, the shale industry was able to forget about the profitability part... Investment banks just kept handing shale producers cash, and shale companies did what they do best: drill, drill and drill some more. As shale gas production soared, the price of natural gas tanked. When Greenspan was appearing before Congress, the general consensus was that the long-term price of natural gas was going to be $6 per million cubic feet or more. At that price, shale gas production was profitable. But most shale gas over the past 10 years has instead been sold at a commodity price that's less than half of that. Today, the commodity trades for less than $2 per million cubic feet. At these prices, with soaring production, shale producers have burned through an absurd amount of cash. The industry has cumulatively spent almost $350 billion more than the cash that its production has generated. [Chart - Red Hat's 49% One-Day Rise After IBM Purchase Announcement]( [Click to see larger chart.]( The financial markets were willing to lend shale drillers like Chesapeake billions upon billions of dollars to keep drilling. When Wall Street turned off the tap, these companies were forced to try to make a go of it off the cash their businesses generated... and of course, they couldn't. With balance sheets loaded with debt from years and years of borrowing, they didn't stand a chance. As a result, shale gas operators that have always borrowed aggressively, like Chesapeake, are failing and leaving shareholders empty-handed. This industry has been a victim of its own success. Excessive production growth killed the price of the commodity, and a lack of financial discipline kept companies spending when they should have been throttling back. The lesson for investors: Cash flow matters, and debt kills. Chesapeake had too much of the bad one (debt) and not nearly enough of the good one (cash flow). Rarely has a company worked so hard and yet accomplished so little. Good investing, Jody P.S. Chesapeake may have failed its long-term investors, but there's no denying that shareholders who scored a 2,000% return in eight years made a pretty penny... During this critical window, Chesapeake profited from what's known as a catalyst - a market event, in this case booming shale production, that sends share prices soaring. Stay tuned next week as Chief Income Strategist Marc Lichtenfeld reveals how to play powerful catalysts in his favorite sector... [Leave a Comment](  MORE FROM WEALTHY RETIREMENT [Can This 5% Yielder Make It 73 Years in a Row?](    [Look for a Cannabis Boom in 2021](    [Debunking 5 Myths About Penny Stocks](  [Facebook]( [Facebook]( [Twitter]( [Twitter]( [Email Share](mailto:?subject=A%20great%20piece%20from%20Wealthy%20Retirement...&body=From%20Wealthy%20Retirement:%0D%0A%0D%0A This%20popular%20shale%20company%20has%20run%20out%20of%20gas... %0D%0A%0Dshared) [Email Share](mailto:?subject=A%20great%20piece%20from%20Wealthy%20Retirement...&body=From%20Wealthy%20Retirement:%0D%0A%0D%0A This%20popular%20shale%20company%20has%20run%20out%20of%20gas... %0D%0A%0D  SPONSORED [Has This Natural Breakthrough FINALLY Defeated Aging?]( [Senior Surfer](  How does [this 80-year-old man]( have a social life and travel schedule that would exhaust most 30-year-olds? According to the world's top anti-aging doctor, it could be thanks to [this astonishing natural breakthrough](. He calls it "the closest we've gotten to a fountain of youth." And with [results like these](... how can you argue? [See the details HERE.](  [The Oxford Club](  You are receiving this email because you subscribed to Wealthy Retirement. Wealthy Retirement is published by The Oxford Club. Questions? Check out our [FAQs](. Trying to reach us? [Contact us here.]( Please do not reply to this email as it goes to an unmonitored inbox. [Privacy Policy]( | [Whitelist Wealthy Retirement]( | [Unsubscribe]( © 2020 The Oxford Club, LLC All Rights Reserved The Oxford Club | [105 West Monument Street](#) | [Baltimore, MD 21201](#) North America: [1.800.589.3430](#) | International: [+1.443.353.4334](#) | Fax: [1.410.329.1923](#) [Oxfordclub.com](   The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. We expressly forbid our writers from having a financial interest in their own securities recommendations to readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of printed-only publications prior to following an initial recommendation. Any investments recommended by The Oxford Club should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of The Oxford Club, 105 W. Monument Street, Baltimore MD 21201.