Chesapeake Energy Corp. (CHK) said its first-quarter profit
soared as the company reported a 47% surge in revenue and higher
production.
The company raised its adjusted production growth outlook for
2014 to 9% to 12%, compared to its February forecast of 2% to 4%
growth, citing higher-than-expected natural gas liquids
volumes.
Earlier this year, the oil and natural-gas company filed for a
possible spinoff of its oilfield services operations, a move the
company had been considering. Chesapeake also said it would change
the name of the division to Seventy Seven Energy Inc. from the
current Chesapeake Oilfield Operating LLC. The division--which
offers drilling, hydraulic fracturing and rig relocation, among
other services--pulled in about $2.2 billion in revenue last
year.
The company said Wednesday that it continues to review asset
dispositions, and that its targeted asset dispositions will add to
earnings and allow it to further reduce overall leverage.
"This was an important and defining quarter for Chesapeake, as
our competitive capital allocation, cost leadership and capital
efficiency initiatives are driving tangible improvements in the
company's growth profile and financial performance," said Chief
Executive Doug Lawler.
Chesapeake reported a profit of $425 million, up from
year-earlier earnings of $102 million. On a per-share basis, which
includes preferred dividend impacts, the profit was 54 cents,
compared with earnings of 2 cents a year earlier. Excluding
mark-to-mark impacts, asset-sale impacts, asset write-downs and
other items, adjusted earnings jumped to 59 cents from 30
cents.
Revenue soared 47% to $5.05 billion.
Analysts polled by Thomson Reuters expected a per-share profit
of 48 cents and revenue of $4.45 billion.
Average daily production climbed 11% to 675,200 barrels of oil
equivalent.
The company has struggled to recover from years of aggressive
spending under co-founder and former Chief Executive Aubrey
McClendon. During his tenure, Chesapeake regularly out-spent the
cash it brought in from operations as the company rapidly expanded
its drilling program across the country, from Pennsylvania to
Texas.
Chesapeake borrowed heavily to finance its growth, and the
company had to start selling assets in 2012 to pay down its debts.
Mr. McClendon left the company in April 2013, largely under
pressure from Chesapeake shareholders.
Write to Erin McCarthy at erin.mccarthy@wsj.com
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