By Tess Stynes 

Chesapeake Energy Corp. said its second-quarter loss narrowed as the embattled energy company's write-downs of its oil-and-gas assets weren't as steep as a year earlier, helping mask the impact of low commodities prices on its revenue.

Like other energy companies, Chesapeake has been taking steps to improve its balance sheet and ride out the commodities downturn.

The Oklahoma City company raised its asset-sales target for this year to more than $2 billion, from its previous estimate of between $1.2 billion to $1.7 billion, saying that it expects to sell some of its acreage in the Haynesville shale. The move comes after Chesapeake recently sold acreage in the Anadarko Basin Stack play to Newfield Exploration Co. for $470 million.

Chesapeake also raised its 2016 production outlook by 3%, citing strong production in the first half of the year. The company expects its capital expenditures to come in at the higher end of its previous guidance for between $1.3 billion and $1.8 billion.

"Financial discipline remains our top priority, and we continue to work toward additional solutions to improve our liquidity, reduce our midstream commitments and enhance our margins," Chief Executive Doug Lawler said in prepared remarks Thursday.

Providing an initial look into production for next year, Mr. Lawler said the company thinks its oil output will be relatively flat compared with 2016, while total production volume is expected to decline roughly 5% from 2016 levels.

Shares fell 2.8% to $5.14 in recent premarket trading as the adjusted per-share loss, excluding certain items, was slightly wider than expected and revenue missed expectations.

Over all, Chesapeake reported a loss of $1.79 billion, or $2.48 a share, compared with a year-earlier loss of $4.15 billion, or $6.27 a share. Excluding asset write-downs, negative derivative impacts and other items, the adjusted per-share loss was 14 cents compared with a year-earlier adjusted loss of 13 cents. Revenue slumped 54% to $1.62 billion, mostly owing to lower commodities prices.

Analysts polled by Thomson Reuters expected per-share loss of 10 cents and revenue of $1.93 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

August 04, 2016 08:11 ET (12:11 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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