By Ezequiel Minaya
Chesapeake Energy Corp. posted a deep loss in the second quarter
as the U.S. shale driller took a $4.02 billion write-down on some
properties following tumbling energy prices.
"While we strive to remain flexible in the face of lower
commodity prices, we continue to focus on driving our costs lower,"
said Doug Lawler, Chesapeake's chief executive.
Earlier this week, the world's benchmark oil price fell to less
than $50 a barrel for the first time in six months signaling a
renewed slide of crude markets brought on as record U.S. production
has touched off an international price war.
Amid the swoon in oil prices, Chesapeake has reduced rig
operations and cut capital expenditures after failing to offset the
plunge with higher production.
Average operated rig count during the latest quarter fell 50%
from the previous quarter to 26, a far cry from the 65 rigs in
operation during the same three-month period in 2014. Drilling and
completion costs were slashed 40% from both the previous quarter
and the same quarter in 2014 to $787 million.
Chesapeake's daily production averaged around 703,000 barrels of
oil equivalent, an increase of 13% over the same period in 2014.
The company also reported its average realized oil price for the
quarter was down to $67.91 from $85.23 in 2014.
Overall, for the quarter ended in June, Chesapeake reported
losses of $4.15 billion, or $6.27 a share, compared with a
prior-year profit of $145 million or 22 cents a share. Excluding
certain items, Chesapeake posted a per-share loss of 11 cents, down
from earnings of 36 cents a share a year earlier.
Revenue fell 41% to $3.03 billion.
Analysts surveyed by Thomson Reuters expected the company to
post a loss of 11 cents per share on revenue of $2.76 billion.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires