Chesapeake Energy Operates Under The Natural Oil And Gas Industry

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Clients Industry and Industry Risk
Chesapeake Energy operates under the natural oil and gas industry. While government’s economic data may separate operations within this industry, the industry covers a broad range of activities and is separated into three segments: upstream, downstream, and midstream. Activities within this industry by oil and gas companies include exploring for crude oil or natural gas, drilling into wells, and such transportation of oil and natural gas. Just as any other industry, the gas and oil industry have major risks that companies take into consideration and extensively consider. These risks have the capability of drastically affecting operations, and ultimately the profitability and financial stability of a company. Three top risks related to oil and gas companies are volatile prices of oil and gas, regulatory changes, and finding new reserves or extending prior ones. Cost Risk
Volatile cost of oil and gas is a critical risk for companies such as Chesapeake. Costs are critical factor in whether oil and gas companies decide to start a new project. While companies try and predict the costs during the term of the project, they can never be too certain. While they cannot be exact on their estimate due to numerous factors; companies must be certain to a degree or they will continuously face unprofitable reserves. One factor that can influence costs that can be unpredictable and unfavorable is adverse weather conditions. Storms and natural disasters

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