Why Chesapeake Energy, Sunoco, and PBF Energy Made Big Moves This Week

Energy stocks continued to be very volatile, with the slightest news or rumor sending some stocks on roller coaster rides. While dozens of energy stocks made big moves this week

according to S&P Capital IQ data, the three most interesting movers were Chesapeake Energy (NYSE:

CHK), Sunoco (NYSE: SUN), and PBF Energy (NYSE: PBF). 

What:Refiner PBF Energy (NYSE: PBF) leapt more than 12% this week.

So What: Key driver: PBF Energy

secured debt funding for the acquisition of Exxon’s Torrance refinery

The company was able to raise $500 million in notes due in 2023 at a 7% interest rate

Now What: This cash, when combined with

a $356.5 million equity raise, gives it adequate capital to pay for the $537 million refinery

Key takeaway: Given the tightening credit markets for energy-related companies, investors are breathing easier now that the required funding has been secured

What:Gas station operator Sunoco (NYSE: SUN) surged more than 15% this week.

So What: Key driver: Sunoco agreed to

buy Energy Transfer Partners’ 68.4% stake in Sunoco LLC

The deal was larger than expected and came well ahead of the company’s target for the end of 2016 to complete the final drop-down

Now What: The transaction will boost

Sunoco’s EBITDA from $500 million to $750 million

Key takeaway: Investors are celebrating the timing of this deal, which eliminates the overhang of a big equity issuance in 2016

What:Natural gas producer Chesapeake Energy (NYSE: CHK) plunged more than 15% this

week.

So What: Key driver: Chesapeake

Energy’s bonds sold off, causing its credit default swaps to surge to record highs

Investors are growing increasingly worried about the company’s ability to repay its debt

Now What: Investors are also growing

concerned that it will seek a second-lien loan to bolster its liquidity

Key takeaway: The company is burning through cash, and that fire won’t go out until commodity prices meaningfully improve

This could be the next billion-dollar iSecret