Battered by low natural gas prices and revelations of executive loans, shares of Chesapeake Energy Corp. are down 27 percent in the last month, but the company isn't alone among its Oklahoma City energy brethren when it comes to a declining stock price.
SandRidge Energy Inc. shares have fallen 13 percent in the last 30 days, while Devon Energy Corp. shares are off 8 percent. Continental Resources Inc. fell 5 percent in the last month.
Natural gas prices, which recently fell to their lowest point in 10 years, are likely the main reason for the stock slides. Oklahoma City's Continental Resources, which has positioned itself as an oil company, has less exposure to natural gas markets.
Meanwhile, a trio of Houston-based independents also saw stock slides in the last month. Apache Corp. is down 10 percent; Anadarko Petroleum Corp. is off 9 percent; and shares in Southwestern Energy Co. have fallen 13 percent.
While low natural gas prices have hurt the energy companies' stock prices, some investors are looking to take advantage.
“If you have a longer-term outlook, this price downturn represents an extremely good buying opportunity,” Mike Kelly, an analyst with Global Hunter Securities in Houston, said of Chesapeake's recent stock slide.
Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, said much of Chesapeake's recent decline has come from news reports last week that Chairman and CEO Aubrey McClendon had taken up to $1.1 billion in loans against his interests in a unique perk called the Founder Well Participation Program.
McClendon, the company and board of directors drew criticism for not adequately disclosing in regulatory filings the loans and sale transactions Chesapeake had with the lenders. Chesapeake said the program was disclosed and the loans were McClendon's personal business. The company provided more details about the loans in a preliminary proxy filing Friday.
Since the year began, Chesapeake shares have fallen almost 24 percent. Shares, which were more than $25 a month ago, closed at $17.77 Tuesday.
Devon shares jumped to as high as $75.81 in March before falling again more recently. For the year, the company's gains are essentially flat. Devon closed at $66.79 per share Tuesday.
SandRidge is down 14 percent for the year, but has traded in the $7 to $8.50 per share range. It closed at $7.28 Tuesday.
Continental posted gains of almost 20 percent for the year. After starting the year at almost $70 per share, it reached $94.93 in late February. Shares have since declined and closed at $83.42 Tuesday.
Dollarhide said energy stocks had a good first few months this year, driven by positive news about additional oil discoveries in the Bakken Field in North Dakota and federal legislative prospects for compressed natural gas for transportation. As the price of natural gas continued to fall, though, so did the stocks for energy companies that are reliant on natural gas production, he said. Those companies are scrambling to switch production to oil and natural gas liquids, which command higher prices on the commodities markets than dry gas.