Newspaper article THE JOURNAL RECORD

Oklahoma's Energy S&P Roster Grows

Newspaper article THE JOURNAL RECORD

Oklahoma's Energy S&P Roster Grows

Article excerpt

The state moved up a notch in the eyes of Wall Street last week when Chesapeake Energy was named to the Standard and Poor's 500 index.

The local company's addition brought Oklahoma's S&P 500 roster to four, and all are in energy.

Devon Energy, Williams Cos. and Kerr-McGee are the veterans of the list, which includes 425 industrial companies, 60 utilities and 15 railroads. Chesapeake replaced Dana Corp. on the index. Dana Corp., an automotive parts manufacturer based in Ohio, on Friday filed for bankruptcy protection.

If you are chosen for the 500, generally you have the largest market value, said Bob Rader of Capital West Securities. You've reached where you want to be. If you are there you are among the leading companies in America.

S&P 500 companies are more attractive to investors, Rader said.

Institutions, mutual funds and endowments look at your stocks, he said. It's quite a coup for Chesapeake Energy to be added. To take a company two guys (Aubrey McClendon and Tom Ward) started from nothing and to build it up to what it is today is truly a special accomplishment.

The Oklahoma members of the index are on solid footing. Collectively, their profits rose better than 50 percent from 2004 to 2005. Together their net profits were more than $5 billion last year and their market capitalization shot up to more than $60 billion.

Thursday marked Chesapeake's first full day of trading as a member of the S&P 500, and company Vice President of Investor Relations and Research Jeff Mobley said he could see the difference.

Trading volume was five times more than normal, Mobley said of the action on the first day. The stock over the last three days has outperformed the index average by 10 percent and has outperformed the (exploration and production) sector by 8 percent. We certainly had an uplift over the last three or four days. It's hard to know if that volume will be sustainable, but it exposes us to a broader universe because it comes with a substantial amount of automatic buying.

Listing on the index is a boost to the company, Mobley said.

In terms of overall corporate psyche, it's nice for Chesapeake to be recognized for its accomplishments and to be included among the top companies, he said. …

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