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Chesapeake Energy Corporation Earnings Results Boost Stock

Chesapeake Energy Corporation (NYSE:CHK) released its Q4 2017 earnings results before opening bell this morning. On an adjusted basis, Chesapeake Energy earnings amounted to 30 cents per share on $1.26 billion in revenue. Analysts had been expecting earnings of 24 cents per share on $1.25 billion in revenue. In the same quarter a year ago, Chesapeake Energy reported $678 million in revenue.

Chesapeake Energy earnings

On a GAAP basis, Chesapeake Energy swung to a profit, posting Q4 2017 earnings of 33 cents per share, compared to the 83 cents per share it lost in the year-ago quarter. EBITDA amounted to $764 million, while adjusted EBITDA was $706 million. Oil, natural gas, natural gas liquids, and unhedged revenues grew 16% year over year on the back of a 3% increase in volumes and higher commodity prices.

The company’s average daily production in Q4 2017 grew 15% year over year to about 593,200 barrels of oil equivalent. The average production consisted of about 99,900 barrels of oil, 2.603bcf of natural gas, and 59,500 barrels of natural gas liquids.

Chesapeake Energy had a principal debt balance of about $9.981 billion at the end of Q4 2017, a slight decline from the $9.989 billion in debt it had at the end of 2016. The energy firm’s liquidity stood at about $2.893 billion at the end of 2017, including $2.893 billion in cash on hand and available borrowing capacity on its credit facility.

“We further demonstrated the depth of our portfolio by closing on approximately $1.3 billion in asset and property sales and signed additional asset sales for approximately $575 million that we expect to close by the end of the 2018 second quarter,” Chesapeake Energy CEO Doug Lawler said in a statement on the company’s Q4 2017 earnings results. “We reduced our outstanding secured term debt by approximately $1.3 billion, or 32 percent, continued to remove legal obligations and recorded the best environmental and safety performance in our company‚Äôs history.”

For 2018, Chesapeake Energy expects its production growth to be 1% to 5% after adjusting for asset sales. The company expects to produce 51 million to 55 million barrels of liquids, 31 million to 33 million barrels of oil, and 20 million to 22 million barrels of natural gas liquids. Chesapeake Energy projects 825 to 875bcf of natural gas and 190 million to 200 million barrels of oil equivalent in total absolute production.

Chesapeake Energy Corporation (NYSE:CHK) stock surged by more than 6% in premarket trades, climbing as high as $2.79 per share following the Q4 2017 earnings release.