Energy Producer Narrows Its Loss -- WSJ
May 06 2016 - 3:03AM
Dow Jones News
By Tess Stynes
Chesapeake Energy Corp. on Thursday said its first-quarter loss
narrowed as the embattled energy producer posted a smaller asset
write-down than a year earlier as the result of low oil and gas
prices.
Chesapeake also reached a deal to sell acreage in the Anadarko
Basin Stack play to Newfield Exploration Co. for $470 million, part
of Chesapeake's broader efforts to improve its balance sheet and
ride out the commodities downturn.
Shares rose 12% to $6.33 in recent premarket trading. The U.S.
shale driller in February said was is aiming to raise as much a $1
billion this year by selling noncore assets.
Chief Executive Doug Lawler said the deal with Newfield
"accelerates value from a portion of our undeveloped acreage that
currently generates very little cash flow, giving us the ability to
enhance current liquidity."
"This transaction contributes substantially to achieving our
previously announced target of an incremental $500 million to $1
billion of asset sales by year-end," Mr. Lawler said. "We
anticipate subsequent divestitures during the second and third
quarters."
Over all, Chesapeake Energy reported a first-quarter loss of
$964 million, or $1.44 a share, compared with a year-earlier loss
of $3.74 billion, or $5.72 a share. Excluding the asset write-down
and other one-time items, the adjusted per-share loss was 10 cents.
Revenue fell 39% to $1.95 billion.
Analysts polled by Thomson Reuters expected a loss of 10 cents a
share on revenue of $2.55 billion.
The Oklahoma City company was co-founded in 1989 by the late
Aubrey McClendon, who died in a car crash in March, a day after he
was indicted on a charge of conspiring to rig bids on oil and gas
leases in Oklahoma. A pioneer the shale energy boom, Mr.
McClendon's extreme risk-taking had caused him personal and
professional financial hardships that spurred activist investors,
including Carl Icahn, to oust him as Chesapeake's chief executive
in 2013.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
May 06, 2016 02:48 ET (06:48 GMT)
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