Chesapeake Energy Corporation (CHK) Misses EPS Estimates


Chesapeake Energy Corporation (NYSE:CHK) released the results from its most recently completed quarter this morning, posting adjusted earnings of 36 cents per share on $5.15 billion in revenue. Analysts had been expecting earnings per share of 52 cents on $4.67 billion in revenue for the second quarter.

Earnings per fully diluted share were 22 cents or $145 million. Items were about $90 million during the quarter. Most of the reduction was losses on buying back debt securities in connection with Chesapeake’s April debt refinancing. That was partially offset by net gains from asset sales.

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Breaking down Chesapeake Energy’s earnings

Adjusted EBITDA was $1.277 billion.

The company reported an average production of about 695,000 barrels of oil equivalent per day during the quarter. That’s a 13% year over year increase when adjusted for asset sales. Average oil production was about 113,400 barrels per day, a 12% increase when adjusted for asset sales.  Average daily NGL production rose 72%, while natural gas production rose 7%.

Chesapeake Energy increased its guidance for daily production rate by 10,000 barrels of oil equivalent. The range now goes to between 685,000 and 705,000 barrels of oil equivalent per day. The company said better production trends in the first half of this year along with a higher number of well connections than what they expected during the second half of the year.

Chesapeake’s Eagle Ford Shale saw average production of about 91,000 barrels of oil equivalent per day. The company’s Mid-Continent region saw an average of 98,000 boe per day, while its Haynesville Shale property reported about 508 million cubic feet of natural gas equivalent per day. Chesapeake’s Utica Shale reported about 67,000 boe a day, while its Northern Marcellus Shale reported about 878 million cubic feet of natural gas equivalent per day. The Southern Marcellus Shale property reported about 58,000 boe per day, while its Powder River Base saw average net production of about 11,000 boe a day.

Chesapeake updates expenditures, asset sales

Chesapeake spent $1.3 billion in capital expenditures, a 27% decline. That includes about $1.131 billion in drilling and completion expenses. The company also spent $54 million on unproved properties and geological and geophysical costs.

The oil giant sold some noncore assets for $675 million and completed the spinoff of its oilfield services business on June 30. In the second half of the year, Chesapeake Energy expects to see over $700 million from a number of asset sales that are in the works.