Chesapeake Energy Loss Narrows
August 04 2016 - 8:30AM
Dow Jones News
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 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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