By Chelsey Dulaney
Chesapeake Energy Corp. swung to a heavy loss in the first
quarter as the U.S. shale driller took a $3.6 billion write-down on
some properties amid tumbling oil and natural gas prices.
Excluding the impairment and other special charges, profit came
in above expectations.
Earlier this year, Chesapeake announced plans to reduce its rig
operations to their lowest level since 2004 amid falling crude-oil
and natural gas prices. It said it would reduce capital
expenditures by 37%, and drop the number of rigs drilling for new
oil and gas finds by about 38%.
Chesapeake has struggled to recover from years of aggressive
spending as the land-grab approach the company pioneered for oil
and gas drilling meant it spent more than its wells generated in
profit. But under Doug Lawler, who joined as chief executive in
June 2013, the company has been selling assets to pay down its
debts.
In the latest quarter, average daily production rose 14% to
686,000 barrels of oil equivalent, adjusted for asset sales. On
average, Chesapeake operated 54 rigs in the quarter, compared with
67 in the fourth quarter and 60 in the prior-year period.
Overall, for the quarter ended March 31, Chesapeake reported a
loss of $3.78 billion, or $5.72 a share, compared with a prior-year
profit of $374 million, or 54 cents a share.
Excluding the write-down and unrealized gains on oil and natural
gas commodity derivatives, per-share earnings were 11 cents, down
from 59 cents a share a year earlier.
Revenue fell 45.3% to $2.76 billion.
Analysts polled by Thomson Reuters had expected a per-share
profit of four cents and revenue of $3.68 billion.
Capital spending grew 8.6% from a year ago to $1.49 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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