Chesapeake Energy Corporation (NYSE:CHK) released its third quarter earnings report before opening bell this morning, posting adjusted earnings per share of 38 cents, compared to 43 cents in last year’s third quarter, on $5.7 billion in revenue. Analysts had been expecting earnings of 33 cents on $4.84 billion in revenue.

Chesapeake Energy Corporation Beats Earnings Estimates

Key metrics from Chesapeake Energy’s earnings report

Reported net income was 26 cents per share, including $82 million worth of items and compared to 24 cents in last year’s third quarter. The largest item was the redemption of all of a subsidiary’s outstanding shares, although that was partially offset by unrealized gains on the company’s commodity derivatives. Adjusted EBITDA was $1.236 billion in the third quarter, compared to $1.325 billion in last year’s third quarter.

The company’s capital expenditures fell 8% to $1.351 billion. That includes a 10% quarter over quarter increase in drilling and completion expenditures. Chesapeake Energy cut its operating expenses and improved its capital efficiency while also excluding its growth target for production and operating below its capital budget.

Chesapeake Energy improves production

Chesapeake Energy reported an average production of 726,000 barrels of oil equivalent per day, an 11% improvement when adjusted for asset sales. Production also increased 5% quarter over quarter and has already hit their year-end target of about 730,000 barrels of oil equivalent per day. The decline in adjusted EBITDA was mostly due to lower realized oil, natural gas and natural gas liquids, which was partially offset by lower expenses and higher production volumes.

Average daily production was about 118,000 barrels of oil, 95,900 barrels of natural gas liquids and 3.1 billion cubic feet of natural gas. Average daily oil production rose 5%, while average daily natural gas liquids production rose 14% and average daily natural gas production increased by 3% when adjusted for asset sales.

Chesapeake Energy reported organic production growth of more than 10% quarter over quarter in four of its key properties: Eagle Ford, Haynesville, Utica and Powder River Basin.