Oil Gas News: Chesapeake Energy Corporation (NYSE:CHK), Exxon Mobil Corporation (NYSE:XOM)

Lakeway, TX -- (SBWIRE) -- 02/22/2013 -- Bestdamnpennystocks, an investment community with a special focus on updating investors with recent news on the U.S. stock market, issues news alert on the following stocks:-

Chesapeake Energy Corporation (NYSE:CHK), the second largest producer of natural gas in the United States is hedging about 50 percent of its gas output for 2013 and a larger proportion of its expected production of crude.

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This would protect the company from falling prices of gas and oil. Till December the company had said that it was `largely unhedged' leaving it vulnerable to fluctuations in prices.

Last year due to having neglected to hedge its production, the company nearly ran out of cash.

Its outgoing chief executive Aubrey McClendon decided to stop all hedging strategies in 2011, with forecasts of a spike in demand for crude oil and natural gas driven by unusual weather patterns.

However the forecasts proved to be erroneous and the company was caught in a risky situation when prices collapsed forcing it to sell assets and raise borrowings.

Hedges are financial instruments such as swaps and futures contracts that commit an energy producer to exchange a portion of output for a fixed price by a certain date.

Meanwhile larger rival Exxon Mobil has been put in a spot after a witness in a trial said that gasoline additive MTBE raised cancer risk in rodents.

Exxon Mobil Corporation (NYSE:XOM) is on trial for allegations of contaminating New Hampshire state's drinking water with the MTBE chemical.

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One of the key witnesses in the trial, Robert Biles is a retired Exxon toxicologist and has been ordered to be a witness for the state.

He told jurors on Thursday that several studies of MTBE on mice and rats showed an increased risk of reproductive problems as well as cancer.

“There was some evidence of severe toxicity in some of the studies,” Biles said.

The state government has estimated that it could cost the exchequer about $818 million to clean up the groundwater which has been polluted by methyl tertiary butyl ether, or MTBE.

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