Chesapeake Swings to Loss on Impairments
November 04 2015 - 8:50AM
Dow Jones News
Chesapeake Energy Corp. swung to a heavy loss in its third
quarter as the U.S. shale driller took a big write-down on some of
its oil and natural gas properties amid tumbling energy prices.
But shares of the company rose 4.7% in premarket trading as its
loss, excluding the $4.51 billion impairment charge and other
special items, was smaller than analysts had expected.
Chesapeake is among the large U.S. energy companies that have
written down the value of their oil fields as a rout in commodities
prices has made properties across the country not worth
drilling.
Oklahoma City-based Chesapeake has also moved to cut 15% of its
workforce, reduce its capital spending and pare back its rig
operations.
In the third quarter, Chesapeake reduced its average operated
rig count to 18, down from 26 in the second quarter and 69 in the
prior-year period.
Chesapeake's daily production averaged around 667,000 barrels of
oil equivalent a day, an increase of 3% over the same period in
2014 adjusted for asset sales. Chesapeake has also been selling
properties to pay off its debt after years of heavy borrowing to
snap up oil and gas prospects under its former chief executive.
The company's average realized oil price for the quarter fell
26% from the prior year to $62.68 a barrel.
Overall, for the quarter ended Sept. 30, Chesapeake reported a
loss of $4.65 billion, compared with a prior-year profit of $662
million.
On a per-share basis, which includes the impact of things like
preferred dividends, Chesapeake reported a loss of $7.08, compared
with a profit of 26 cents a year earlier.
Excluding the $4.51 billion impairment charge and other items,
Chesapeake posted a per-share loss of 5 cents. Analysts had
forecast a steeper loss of 13 cents a share.
Revenue plunged 49% to $2.89 billion, missing the $3.02 billion
analysts had forecast.
Capital spending fell to $623 million from $1.52 billion in the
prior-year period.
For the full year, the company is now forecasting capital
spending of $3.4 billion to $3.9 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 04, 2015 08:35 ET (13:35 GMT)
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