Chesapeake Energy Corporation (NYSE:CHK) has been gradually putting the pieces back over the last year or so, and analysts are starting to appreciate what they’re seeing more and more. In a report dated May 20, 2014, Oppenheimer analysts Fadel Gheit and Robert Du Boff increased their price target for the company from $30 to $35 per share and reiterated their Outperform rating on the stock.

Chesapeake Energy

Chesapeake Energy holds analyst day

Chesapeake Energy Corporation (NYSE:CHK) held its first analyst day since new CEO Doug Lawler took over the reins of the company. He shared his vision for the company and his plans to create long-term value for shareholders. He said cost leadership and efficiency in capital and operating costs would be the main drivers of Chesapeake’s profitable growth.

At Friday’s analyst day, Chesapeake Energy Corporation (NYSE:CHK) also announced official plans to spin off its oil field services division and sell some more assets. The goal is to become more flexible financially while also simplifying the capital and operating structure. The Oppenheimer team believes these strategies are the right ones, so they have increased their estimates based on Chesapeake’s updated guidance and recent divestures.

Chesapeake Energy shifts strategy

Over the last year or so, Chesapeake Energy Corporation (NYSE:CHK) has been shifting its strategy away from resource capturing toward value creation. In order to accomplish the new strategy, the company has been focusing on capital efficiency, reducing complexities, expanding its core, and growing its cash flow. Based on current progress, the company updated its long-term guidance for compound annual growth in production of between 7% and 9%.

The Oppenheimer analysts have updated their analysts based on this new production guidance, as well as estimated expenses and costs. They are now looking for earnings of $2.45 per share this year and $2.46 per share next year. They think earnings will be basically flat from this year to net because of Chesapeake Energy Corporation (NYSE:CHK)’s asset sales and also falling commodity prices.

Updated guidance from Chesapeake Energy

Chesapeake Energy Corporation (NYSE:CHK)  guided for full-year production, excluding any future divestures, to grow by between 9% and 12%, which would be between 675 million and 695 million barrels of oil equivalent per day.  That’s compared to the guidance of between 8% and 10% growth in February. With prices of $95 per barrel for oil and $4.50 per cubic feet of gas, the company projects between $5.55 billion and $5.75 billion in operating cash flow. It expects to spend between $5 billion and $5.4 billion on capital expenditures this year and distribute between $1.11 billion and $1.16 billion in capitalized interest.