OKLAHOMA CITY, May 11, 2021 /PRNewswire/ -- Chesapeake
Energy Corporation (NASDAQ: CHK) today reported 2021 first quarter
results, launched a cash dividend program based on strong operating
cash flow performance and announced its updated 2021 guidance.
Highlights include:
- Successor net income totaled $295
million, or $2.75 per diluted
share
- Generated adjusted EBITDAX (a non-GAAP measure) of
$510 million for the combined 2021
Successor and Predecessor Periods (January
1, 2021 - March 31,
2021)
- March 31, 2021 unrestricted
cash balance of $340 million;
reducing March 31, 2021 net debt (a
non-GAAP measure) to adjusted 2021E EBITDAX ratio to
0.6x
- Launched sustainable dividend at an initial annual rate
of $1.375 per share to be paid
quarterly beginning in the 2021 Second Quarter; base dividend built
to withstand commodity price volatility with incremental cash
return strategy to be defined by year end 2021
- Increased five-year cumulative free cash flow (a non-GAAP
measure) outlook to ~$3
billion
Mike Wichterich, Chesapeake's
Board Chairman and Interim Chief Executive Officer, commented, "Our
strong first quarter results demonstrate the significant value
creating opportunities that lie ahead for Chesapeake. We are
committed to returning meaningful cash to our shareholders and are
pleased to announce a highly competitive dividend that is built to
withstand commodity price cycles. With our talented employees,
pristine balance sheet, operational leadership, and free cash flow
outlook, I firmly believe Chesapeake is poised to deliver
differential returns to our shareholders."
Dividend Policy and Balance Sheet Update
Following Chesapeake's emergence from Chapter 11 restructuring
proceedings, the company generated $409
million of operating cash flow and ended the quarter with
$340 million of unrestricted cash on
hand. As of April 30, 2021,
Chesapeake had approximately $500
million of unrestricted cash on hand. With the company's
strong liquidity position and free cash flow generation,
Chesapeake's Board of Directors has declared an annual dividend on
its common shares of $1.375 per
share. The dividend will be paid quarterly, with the first such
payment to be payable on June 10,
2021 to shareholders of record at the close of business on
May 24, 2021.
Operations Update
Chesapeake achieved an average net production rate of
approximately 436,000 barrels of oil equivalent per day
(approximately 77 percent natural gas and 23 percent total liquids)
during the 2021 first quarter. Chesapeake is currently operating
seven rigs across its portfolio, with three rigs in Appalachia,
three rigs in Haynesville and one rig in South Texas.
Fresh Start Accounting and Predecessor and Successor
Periods
In connection with our emergence from bankruptcy on February 9, 2021, Chesapeake qualified for and
applied fresh start accounting. In applying fresh start accounting,
Chesapeake allocated its reorganization value to its individual
assets based on their estimated fair values. Accordingly, the
consolidated financial statements after February 9, 2021 are not comparable with the
consolidated financial statements as of or prior to that date.
References to "Successor" refer to the post-emergence reorganized
Chesapeake after February 9, 2021,
and references to "Predecessor" refer to pre-emergence Chesapeake
for periods on or before February 9,
2021.
Outlook and Guidance Update
Today, Chesapeake released its first complete post-restructuring
guidance and outlook for the full year 2021, including full-year
cost estimates and projections for production and capital
expenditures. In addition, the company announced that it expects
total production levels in 2022 to remain flat to 2021, with
natural gas increasing to approximately 85% of the total production
mix for 2022.
Conference Call Information
Chesapeake will conduct a conference call to discuss these
results on Wednesday, May 12, 2021 at
9:00 am EDT. The telephone number to
access the conference call is 888-317-6003 or 412-317-6061 for
international callers. The passcode for the call is 2667856.
Financial Statements and Guidance Documents
The company's 2021 first quarter financial and operational
results, along with non-GAAP measures that adjust for items that
are typically excluded by securities analysts, and management's
updated guidance for the remainder of 2021 are available on our
website at www.chk.com.
Non-GAAP Disclosures
This news release includes non-GAAP financial measures. Such
non-GAAP measures should be not considered as an alternative to
GAAP measures. Reconciliations of these non-GAAP measures and other
disclosures are provided with the supplemental financial tables
available on our website at www.chk.com.
Headquartered in Oklahoma
City, Chesapeake Energy Corporation's (NASDAQ: CHK)
operations are focused on discovering and responsibly developing
its large and geographically diverse resource base of
unconventional oil and natural gas assets onshore in the United States.
Forward-Looking Statements
This news release and the accompanying outlook include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are statements
other than statements of historical fact. They include statements
that give our current expectations, management's outlook guidance
or forecasts of future events, expected natural gas and oil growth
trajectory, projected cash flow and liquidity, our ability to
enhance our cash flow and financial flexibility, dividend plans,
future production and commodity mix, plans and objectives for
future operations, the ability of our employees, portfolio strength
and operational leadership to create long-term value, and the
assumptions on which such statements are based. Although we believe
the expectations and forecasts reflected in the forward-looking
statements are reasonable, we can give no assurance they will prove
to have been correct. They can be affected by inaccurate or changed
assumptions or by known or unknown risks and uncertainties.
Factors that could cause actual results to differ materially
from expected results include those described under "Risk Factors"
in Item 1A of our annual report on Form 10-K and any updates to
those factors set forth in Chesapeake's subsequent quarterly
reports on Form 10-Q or current reports on Form 8-K (available at
http://www.chk.com/investors/sec-filings). These risk factors
include: the impact of the COVID-19 pandemic and its effect on the
company's business, financial condition, employees, contractors and
vendors, and on the global demand for oil and natural gas and U.S.
and world financial markets; the volatility of oil, natural gas and
NGL prices; the limitations our level of indebtedness may have on
our financial flexibility; our inability to access the capital
markets on favorable terms; the availability of cash flows from
operations and other funds to fund cash dividends, to finance
reserve replacement costs or satisfy our debt obligations;
write-downs of our oil and natural gas asset carrying values due to
low commodity prices; our ability to replace reserves and sustain
production; uncertainties inherent in estimating quantities of oil,
natural gas and NGL reserves and projecting future rates of
production and the amount and timing of development expenditures;
our ability to generate profits or achieve targeted results in
drilling and well operations; leasehold terms expiring before
production can be established; commodity derivative activities
resulting in lower prices realized on oil, natural gas and NGL
sales; the need to secure derivative liabilities and the inability
of counterparties to satisfy their obligations; adverse
developments or losses from pending or future litigation and
regulatory proceedings, including royalty claims; charges incurred
in response to market conditions; drilling and operating risks and
resulting liabilities; effects of environmental protection laws and
regulations on our business; legislative and regulatory initiatives
further regulating hydraulic fracturing; our need to secure
adequate supplies of water for our drilling operations and to
dispose of or recycle the water used; impacts of potential
legislative and regulatory actions addressing climate change;
federal and state tax proposals affecting our industry; potential
OTC derivatives regulation limiting our ability to hedge against
commodity price fluctuations; competition in the oil and gas
exploration and production industry; a deterioration in general
economic, business or industry conditions; negative public
perceptions of our industry; limited control over properties we do
not operate; pipeline and gathering system capacity constraints and
transportation interruptions; terrorist activities and
cyber-attacks adversely impacting our operations; and an
interruption in operations at our headquarters due to a
catastrophic event.
In addition, disclosures concerning the estimated
contribution of derivative contracts to our future results of
operations are based upon market information as of a specific date.
These market prices are subject to significant volatility. Our
production forecasts are also dependent upon many assumptions,
including estimates of production decline rates from existing wells
and the outcome of future drilling activity. We caution you not to
place undue reliance on our forward-looking statements that speak
only as of the date of this news release, and we undertake no
obligation to update any of the information provided in this
release, except as required by applicable law. In addition, this
news release contains time-sensitive information that reflects
management's best judgment only as of the date of this news
release.
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
Brad Sylvester,
CFA
|
Gordon
Pennoyer
|
(405)
935-8870
|
(405)
935-8878
|
ir@chk.com
|
media@chk.com
|
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SOURCE Chesapeake Energy Corporation