Chesapeake Energy Corp., Oklahoma City (NYSE: CHK) meeting with analysts on Oct. 15 will be interesting, coming on the heels of the Oct. 10 stock-price collapse and huge insider selling, forecast Tudor, Pickering, Holt & Co. Securities Inc. analysts David Heikkinen and Brad Pattarozzi.

Late-afternoon statements on Oct. 10 “should alleviate some investor concerns that Chesapeake has some lurking boogeyman in the closet,” they add.

On Oct. 10, Chesapeake chief executive officer Aubrey K. McClendon announced that he lost substantially all of his shares of the company’s common stock to meet margin loan calls. He added that his confidence in Chesapeake remains undiminished, and he plans to rebuild ownership in the company.

Separately, Chesapeake reports it has invested its cash proceeds in U.S. Treasury and other highly liquid securities to make sure its revolving credit facility could be fully utilized during current market issues. As of Sept. 30, Chesapeake had $1.5 billion in cash and cash equivalents on hand. All 36 lenders that participate in the credit facility fully funded their commitment, with the exception of Lehman Brothers, which is in bankruptcy protection. The facility matures in November 2012 and its first maturity of senior unsecured notes is in July 2013.

The company also reports that it will continue its divestment plans and currently plans to generate $2.5- to $3 billion in the fourth quarter from the sale of a 25% interest in the Marcellus shale, leasehold and production in three other areas and closing of a fourth volumetric-production-payment deal.

The Pickering analysts report, “The only real way for Chesapeake to calm liquidity fears is to just grind it out day by day, get through a fourth-quarter cash crunch via asset sales and/or more capex cuts, and prove that the company is sound.”

Chesapeake’s reserves are still up 11% over year-end 2007, and new estimates will be made this week.

“Total resource potential jumped from 45 trillion cubic feet equivalent to 60 trillion cubic feet equivalent, but no one is paying for potential today,” the analysts report.

They add that if Chesapeake only develops 50% of its Haynesville acreage with well results that that match their curve—initial production rates of 7.5 million cubic feet equivalent—the asset is worth about $20 per share, or roughly 20% above the current stock price.

“Without question, investors will require a review of Chesapeake’s balance sheet and funding capability…as well as a discussion of funding priorities in order to understand how the company will spend money in various commodity-price scenarios,” they report. “Hedging counterparties will also be a focus. Remember the good old days when it was about things like acreage position and well results?”

They add that they believe McClendon is a fighter “and doubt that he would voluntarily leave Chesapeake at this juncture or stock price.”--JAS