REI - Chesapeake Energy: New Direction Has Some Holes In It

• The natural gas production strategy may be too extreme.
• The variable dividend of 50% of distributable cash flow is probably too high.
• The company may miss some good acquisitions or shareholders will suffer more dilution because the cash is paid out.
• The information provided by management appears to show a misallocation of capital.
• The cost of a misallocated capital budget is future profitability.

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