Chesapeake Presents '14 Outlook, Shares Rise - Analyst Blog
February 12 2014 - 3:55PM
Zacks
Chesapeake Energy Corporation’s (CHK) share
price moved up 1.7% to $24.82 per share as investors reacted
positively to its outlook and capital program for 2014.
The company expects total capital expenditures in the range of
$5.2–$5.6 billion, down 20% from the midpoint of its 2013
budget.
Production growth is projected at 8–10% year over year, adjusted
for 2013 asset sales. Of the total production growth, 8–12% is
expected from oil, 44–49% will come from natural gas liquids and
4–6% from natural gas.
On an absolute basis, Chesapeake has projected 2014 production
growth of 2–4%, which is equivalent to an average daily production
rate of 680–695 thousand barrels of oil equivalent (MBoe).
During 2014, Chesapeake plans to drill around 1,100 gross operated
wells, unchanged from the 2013 activity level. The company intends
to connect around 1,300 gross operated wells to sales in 2014, 115
less than 2013.
Chesapeake expects lower per-unit production and general and
administrative (G&A) expense in 2014 due to the ongoing cost
control initiatives. Production expense is expected between $4.25
and $4.75 per barrel of oil equivalent (Boe), down about 10%
annually from the midpoint of Chesapeake’s 2013 production expense
outlook range. G&A expense is anticipated at $1.35–$1.60 per
Boe, down about 25% annually from the midpoint of Chesapeake’s 2013
production expense outlook range.
Owing to its size and quality of asset base, the company is
confident of delivering a long-term production growth per
debt-adjusted share of 5–9% annually as well as maintains a
controlled capital spending profile.
Chesapeake carries a Zacks Rank #3 (Hold). However, there are
better-ranked stocks in the oil and gas industry like
Helmerich & Payne, Inc. (HP), NGL
Energy Partners LP (NGL) and Cabot Oil & Gas
Corp. (COG). All these stocks sport a Zacks Rank #1
(Strong Buy).
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
CABOT OIL & GAS (COG): Free Stock Analysis Report
HELMERICH&PAYNE (HP): Free Stock Analysis Report
NGL ENERGY PART (NGL): Free Stock Analysis Report
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