How the ‘Surprising’ Acquisition of WildHorse Resource Benefits Chesapeake Energy
Chesapeake Energy Corporation's decision to acquire WildHorse Resource Development for nearly $4 billion in cash and stock came as a surprise to many investors, especially given the recent oil rout.
However, the CEO of Chesapeake Energy, Doug Lawler, labeled this deal as one of the most exciting events in the recent history of the company, in terms of it could potentially transform the company.
So how would this deal help Chesapeake Energy?
First, the acquisition of WildHorse is expected to strengthen and accelerate the delivery of Chesapeake's near-term strategic priorities of margin improvement, sustainable free cash flow generation, and a net debt-to-EBITDA ratio of 2.0. As the bulk of WildHorse's current production consists of higher-margin oil, CHK expects its margins on a per-barrel of oil equivalent (BOE) basis following this deal to expand by 35% in 2019 and more than 50% by 2020.
Second, with this acquisition, CHK is expected to more than double its production by 2020. As CHK adds WildHorse's 420,000 oil-rich acres in the Eagle Ford Shale to its assets, nearly 80% to 85% of which is unexplored, it could transform CHK into an oil growth machine in the coming years.
Third, the “surprise” addition of WildHorse is expected to immediately boost CHK's financial profile along with future growth prospects. The increased scale of its operations, coupled with its ability to drill longer through its capital-efficient drilling mechanism, will help the company in yielding stronger drilling returns as well as eliminate additional oilfield service and supply chain costs.
WRD in +4.57% Uptrend, rising for three consecutive days on June 09, 2025
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where WRD advanced for three days, in of 23 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 4 cases where WRD's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on June 30, 2025. You may want to consider a long position or call options on WRD as a result. In of 11 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for WRD just turned positive on June 30, 2025. Looking at past instances where WRD's MACD turned positive, the stock continued to rise in of 3 cases over the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
WRD moved below its 50-day moving average on May 29, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for WRD crossed bearishly below the 50-day moving average on June 13, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 3 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WRD declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for WRD entered a downward trend on June 30, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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