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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 2023
chesapeakelogocolora42.jpg
CHESAPEAKE ENERGY CORPORATION
(Exact name of Registrant as specified in its Charter)
Oklahoma1-1372673-1395733
(State or other jurisdiction of
incorporation)
(Commission File No.)(IRS Employer Identification No.)
6100 North Western AvenueOklahoma CityOK73118
(Address of principal executive offices)(Zip Code)
(405)848-8000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareCHKThe Nasdaq Stock Market LLC
Class A Warrants to purchase Common StockCHKEWThe Nasdaq Stock Market LLC
Class B Warrants to purchase Common StockCHKEZThe Nasdaq Stock Market LLC
Class C Warrants to purchase Common StockCHKELThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02 Results of Operations and Financial Condition.

On August 1, 2023, Chesapeake Energy Corporation (“Chesapeake”) issued a press release reporting financial and operational results for the second quarter of 2023. A copy of the press release and financial information are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.

The information in the press release is being furnished, not filed, pursuant to Item 2.02. Accordingly, the information in the press release will not be incorporated by reference into any registration statement filed by Chesapeake under the Securities Act of 1933, as amended, except as set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure.

On August 2, 2023, Chesapeake will make a presentation about its financial and operating results for the second quarter of 2023, as noted in the press release described in Item 2.02 above. Chesapeake has made the presentation available on its website at http://investors.chk.com.

This information is being furnished, not filed, pursuant to Item 7.01. Accordingly, this information will not be incorporated by reference into any registration statement filed by Chesapeake Energy Corporation under the Securities Act of 1933, as amended, except as set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits
Exhibit No.Document Description
Chesapeake Energy Corporation press release dated August 1, 2023
Supplemental Financial Information
104.0Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CHESAPEAKE ENERGY CORPORATION
By: /s/ DOMENIC J. DELL’OSSO, JR.
Domenic J. Dell’Osso, Jr.
President and Chief Executive Officer
Date: August 1, 2023


Exhibit 99.1
N E W S   R E L E A S E

chklogo20191.jpg
FOR IMMEDIATE RELEASE
AUGUST 1, 2023

CHESAPEAKE ENERGY CORPORATION REPORTS 2023 SECOND QUARTER RESULTS
OKLAHOMA CITY, August 1, 2023 – Chesapeake Energy Corporation (NASDAQ:CHK) today reported 2023 second quarter financial and operating results.
Net cash provided by operating activities of $515 million
Net income of $391 million, or $2.73 per diluted share (all per share amounts stated on a diluted basis); adjusted net income(1) of $92 million, or $0.64 per share
Delivered total net production of 3,653 mmcfe per day and adjusted EBITDAX(1) of $524 million
Increased base dividend approximately 4.5%; announced total quarterly dividend of $0.575 per common share to be paid in September 2023
Completed approximately $125 million of share repurchases during second quarter; returned approximately $515 million YTD through second quarter via dividends and share repurchases
Cash on hand of approximately $900 million as of June 30, 2023
Received recent upgrades to Ba1 and BB+ from Moody’s and Fitch Ratings, respectively; continued path towards Investment Grade credit status
Entered into new heads of agreements (HOA) with Lake Charles LNG supporting previously announced Gunvor LNG HOA
Achieved Grade “A” MiQ and Grade “A-” EO100TM Recertification for Marcellus Operations
(1) A Non-GAAP measure as defined in the supplemental financial tables available on the company's website at www.chk.com.

Nick Dell'Osso, Chesapeake's President and Chief Executive Officer, said, “Our team delivered another strong quarter, driven by outstanding operational results across our portfolio. We were purposefully built to deliver sustainable performance through commodity cycles. Our strong balance sheet and deep liquidity underpin the leading rock, returns and runway of our portfolio and have allowed us to repurchase shares at a compelling valuation and grow our base dividend. Our focus is clear – to Be LNG Ready and opportunistically capitalize on our strong financial position and leading operating performance. We remain confident in our ability to deliver affordable, reliable, lower carbon energy with peer-leading returns to shareholders.”

INVESTOR CONTACT:MEDIA CONTACT:CHESAPEAKE ENERGY CORPORATION
Chris Ayres
(405) 935-8870
ir@chk.com
Brooke Coe
(405) 935-8878
media@chk.com
6100 North Western Avenue
P.O. Box 18496
Oklahoma City, OK 73154



Operational Results
Second quarter net production was approximately 3,653 mmcfe per day (96% natural gas and 4% total liquids), utilizing an average of 12 rigs to drill 53 wells and place 27 wells on production.
Chesapeake is currently operating nine rigs including four in the Marcellus and five in the Haynesville. As previously announced, the company released a rig from the Marcellus at the beginning of the third quarter and another from the Haynesville this week. Drilling operations in the Eagle Ford asset have concluded for the year.
The company is currently operating one frac crew in the Marcellus and one in the Haynesville having released one crew each from the Marcellus, Haynesville, and Eagle Ford in the second or beginning of the third quarter.
Chesapeake continued to build upon its peer leading operational performance, recognizing additional efficiency improvements during the second quarter. In the Marcellus, the company drilled three of the five fastest wells in its history, including the fastest well, a 10,383-foot lateral to a total depth of 17,083 feet in less than eight days. In the Haynesville, continuous pumping technology employed in 2023 has led to a greater than 20% increase in efficiencies relative to previous zipper operations. In addition to the multiple D&C performance records, the combined employee and contractor Total Recordable Incident Rate for the first half of 2023, was more than 50% improved from the same time period last year
The company expects to drill 30 to 40 wells and place 40 to 50 wells on production in the third quarter of 2023. The company's operating plan remains flexible and is prepared for further adjustments based on market conditions.
Year-to-date, the company has acquired 10,000 net acres through its ongoing leasing program in the Marcellus and Haynesville at an average cost of $2,400 per acre.
On its continued path to Be LNG Ready, the company entered into a Heads of Agreement (HOA) with Energy Transfer LP’s Lake Charles LNG project. Under the agreement, Chesapeake will supply to Lake Charles LNG volumes of natural gas sufficient to produce up to 1.0 mtpa of LNG which, post liquefaction, would be purchased by Gunvor at a price indexed to JKM for a period of 15 years.
Financial and Shareholder Return Update

During the second quarter of 2023, Chesapeake generated $515 million of operating cash flow and had $903 million of cash on hand with zero dollars drawn on its credit facility at quarter-end. Chesapeake increased its base dividend 4.5%, and will pay $0.575/share on September 6, 2023, to shareholders of record at the close of business on August 17, 2023.

Through July 31, 2023, Chesapeake repurchased approximately 2.6 million shares of its common stock for approximately $200 million at an average price of $78.53 per share. Chesapeake has approximately $725 million remaining under its share repurchase program and, in total, has repurchased approximately 14 million shares of its common stock at a cost of approximately $1.275 billion under its current $2 billion authorization.

Since April, Chesapeake’s IDR has been updated to ‘BB+’ maintaining a positive outlook and ‘Ba1’ with a stable outlook by Fitch Ratings and Moody’s, respectively. The agencies attributed strengths of scale, conservative financial policy, and cash optionality as fundamental to the company’s continued rating improvement. Chesapeake now sits one notch below investment grade at the agencies.
Sustainability Update
Chesapeake achieved recertification of its natural gas production across the entirety of its Marcellus operations, which averaged approximately 4.4 billion cubic feet (bcf) of gross natural gas per day during the second quarter of 2023. The company received a grade A under the MiQ methane emissions standard and a grade A- from Equitable Origin's EO100™ Standard for Responsible Energy Development, which focuses on environmental, social and governance (ESG) performance. The company expects to obtain recertification of its Haynesville assets in December.
The company also published its 2022 Sustainability Report in June, marking Chesapeake's 11th year reporting on its environmental, social and governance (ESG) performance. The report continues the company's commitment to transparency, enhanced disclosures and measurable progress.
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Conference Call Information
Chesapeake plans to conduct a conference call to discuss recent financial and operating results at 9:00 a.m. EDT on Wednesday, August 2, 2023. 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 7847679.

Financial Statements, Non-GAAP Financial Measures and 2023 Guidance
The company’s 2023 second quarter financial and operational results, along with non-GAAP measures that adjust for items that are typically excluded by securities analysts, are available on the company's website. 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 the company's website at www.chk.com. Management’s updated guidance for 2023 can be found within the company’s quarterly data supplement found on their website at www.chk.com.

Headquartered in Oklahoma City, Chesapeake Energy Corporation (NASDAQ:CHK) is powered by dedicated and innovative employees who are focused on discovering and responsibly developing leading positions in top U.S. oil and gas plays. With a goal to achieve net zero GHG emissions (Scope 1 and 2) by 2035, Chesapeake is committed to safely answering the call for affordable, reliable, lower carbon energy.

Forward-Looking Statements

This release includes “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 (the “Exchange Act”). Forward-looking statements include our current expectations or forecasts of future events, including matters relating to the continuing effects of the impact of inflation and commodity price volatility resulting from Russia’s invasion of Ukraine, COVID-19 and related supply chain constraints, and the impact of each on our business, financial condition, results of operations and cash flows, the potential effects of the Plan on our operations, management, and employees, actions by, or disputes among or between, members of OPEC+ and other foreign oil-exporting countries, market factors, market prices, our ability to meet debt service requirements, our ability to continue to pay cash dividends, the amount and timing of any cash dividends, and our ESG initiatives. Forward-looking and other statements in this release regarding our environmental, social and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Forward-looking statements often address our expected future business, financial performance and financial condition, and often contain words such as "expect," “could,” “may,” "anticipate," "intend," "plan," “ability,” "believe," "seek," "see," "will," "would," “estimate,” “forecast,” "target," “guidance,” “outlook,” “opportunity” or “strategy.”

Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: the impact of inflation and commodity price volatility resulting from Russia’s invasion of Ukraine, COVID-19 and related labor and supply chain constraints, along with the effects of the current global economic environment, including impacts from higher interest rates and recent bank closures and liquidity concerns at certain financial institutions, on our business, financial condition, employees, contractors, vendors and the global demand for natural gas and oil and U.S. and on world financial markets; our ability to comply with the covenants under the credit agreement for our New Credit Facility and other indebtedness; risks related to acquisitions or dispositions, or potential acquisitions or dispositions; our ability to realize anticipated cash cost reductions; the volatility of natural gas, oil and NGL prices, which are affected by general economic and business conditions, as well as increased demand for (and availability of) alternative fuels and electric vehicles; a deterioration in general economic, business or industry conditions; uncertainties inherent in estimating quantities of natural gas, oil and NGL reserves and projecting future rates of production and the amount and timing of development expenditures; our ability to replace reserves and sustain production; drilling and operating risks and resulting liabilities; our ability to generate profits or achieve targeted results in drilling and well operations; the limitations our level of indebtedness may have on our financial flexibility; our ability to achieve and maintain ESG certifications, goals and commitments; our inability to access the capital markets on favorable terms; the availability of cash flows from operations and other funds to fund cash dividends and repurchases of equity securities, to finance reserve replacement costs and/or satisfy our debt obligations; write-downs of our natural gas and oil asset carrying values due to low commodity prices; charges
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incurred in response to market conditions; limited control over properties we do not operate; leasehold terms expiring before production can be established; commodity derivative activities resulting in lower prices realized on natural gas, oil and NGL sales; the need to secure derivative liabilities and the inability of counterparties to satisfy their obligations; potential OTC derivatives regulations limiting our ability to hedge against commodity price fluctuations; adverse developments or losses from pending or future litigation and regulatory proceedings, including royalty claims; our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used; pipeline and gathering system capacity constraints and transportation interruptions; legislative, regulatory and ESG initiatives, addressing environmental concerns, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal; terrorist activities and/or cyber-attacks adversely impacting our operations; an interruption in operations at our headquarters due to a catastrophic event; federal and state tax proposals affecting our industry; competition in the natural gas and oil exploration and production industry; negative public perceptions of our industry; effects of purchase price adjustments and indemnity obligations; the ability to execute on our business strategy following emergence from bankruptcy; and other factors that are described under Risk Factors in Item 1A of our 2022 Form 10-K.

We caution you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the filing date, and we undertake no obligation to update this information. We urge you to carefully review and consider the disclosures in this release and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.

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Exhibit 99.2
CHESAPEAKE ENERGY CORPORATION - SUPPLEMENTAL TABLES
1



CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
($ in millions, except per share data)June 30, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$903 $130 
Restricted cash72 62 
Accounts receivable, net671 1,438 
Short-term derivative assets417 34 
Assets held for sale— 819 
Other current assets157 215 
Total current assets2,220 2,698 
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties11,201 11,096 
Unproved properties2,000 2,022 
Other property and equipment501 500 
Total property and equipment13,702 13,618 
Less: accumulated depreciation, depletion and amortization(3,049)(2,431)
Total property and equipment, net10,653 11,187 
Long-term derivative assets78 47 
Deferred income tax assets952 1,351 
Other long-term assets526 185 
Total assets$14,429 $15,468 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$642 $603 
Accrued interest39 42 
Short-term derivative liabilities26 432 
Other current liabilities944 1,627 
Total current liabilities1,651 2,704 
Long-term debt, net2,036 3,093 
Long-term derivative liabilities29 174 
Asset retirement obligations, net of current portion277 323 
Other long-term liabilities40 50 
Total liabilities4,033 6,344 
Contingencies and commitments
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized:
  132,684,741 and 134,715,094 shares issued
Additional paid-in capital5,726 5,724 
Retained earnings4,669 3,399 
Total stockholders' equity10,396 9,124 
Total liabilities and stockholders' equity$14,429 $15,468 
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended
June 30, 2023
Three Months Ended
June 30, 2022
Six Months Ended
June 30, 2023
Six Months Ended
June 30, 2022
($ in millions, except per share data)
Revenues and other:
Natural gas, oil and NGL$649 $2,790 $2,102 $4,704 
Marketing611 1,223 1,263 2,090 
Natural gas and oil derivatives159 (514)1,089 (2,639)
Gains on sales of assets472 21 807 300 
Total revenues and other1,891 3,520 5,261 4,455 
Operating expenses:
Production89 118 220 228 
Gathering, processing and transportation207 274 471 516 
Severance and ad valorem taxes40 57 109 120 
Exploration15 12 
Marketing611 1,228 1,262 2,079 
General and administrative31 36 66 62 
Separation and other termination costs— — 
Depreciation, depletion and amortization376 451 766 860 
Other operating expense, net12 31 
Total operating expenses1,374 2,179 2,924 3,908 
Income from operations517 1,341 2,337 547 
Other income (expense):
Interest expense(22)(36)(59)(68)
Other income23 33 25 
Total other income (expense)(27)(26)(43)
Income before income taxes518 1,314 2,311 504 
Income tax expense127 77 531 31 
Net income available to common stockholders$391 $1,237 $1,780 $473 
Earnings per common share:
Basic$2.93 $9.75 $13.27 $3.82 
Diluted$2.73 $8.27 $12.36 $3.25 
Weighted average common shares outstanding (in thousands):
Basic133,514 126,814 134,125 123,826 
Diluted143,267 149,532 144,007 145,534 


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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
($ in millions)Three Months Ended
June 30, 2023
Three Months Ended
June 30, 2022
Six Months Ended
June 30, 2023
Six Months Ended
June 30, 2022
Cash flows from operating activities:
Net income$391 $1,237 $1,780 $473 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization376 451 766 860 
Deferred income tax expense21 — 399 — 
Derivative (gains) losses, net(159)514 (1,089)2,639 
Cash receipts (payments) on derivative settlements, net236 (1,043)(49)(1,611)
Share-based compensation16 10 
Gains on sales of assets(472)(21)(807)(300)
Exploration10 
Other12 13 21 
Changes in assets and liabilities96 (254)359 (324)
Net cash provided by operating activities515 909 1,404 1,762 
Cash flows from investing activities:
Capital expenditures(530)(415)(1,027)(759)
Business combination, net— — — (2,006)
Contributions to investments(49)— (88)— 
Proceeds from divestitures of property and equipment1,032 — 1,963 403 
Net cash provided by (used in) investing activities453 (415)848 (2,362)
Cash flows from financing activities:
Proceeds from New Credit Facility125 — 1,125 — 
Payments on New Credit Facility(125)— (2,175)— 
Proceeds from Exit Credit Facility— 2,985 — 4,550 
Payments on Exit Credit Facility— (2,710)— (3,775)
Funds held for transition services97 — 97 — 
Proceeds from warrant exercise— — 
Cash paid to repurchase and retire common stock(127)(475)(181)(558)
Cash paid for common stock dividends(160)(298)(335)(508)
Net cash used in financing activities(190)(496)(1,469)(288)
Net increase (decrease) in cash, cash equivalents and restricted cash778 (2)783 (888)
Cash, cash equivalents and restricted cash, beginning of period197 28 192 914 
Cash, cash equivalents and restricted cash, end of period$975 $26 $975 $26 
Cash and cash equivalents$903 $17 $903 $17 
Restricted cash72 72 
Total cash, cash equivalents and restricted cash$975 $26 $975 $26 
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NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
Three Months Ended June 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,830 1.51 — — — — 1,830 1.51 
Haynesville1,590 1.77 — — — — 1,590 1.77 
Eagle Ford85 2.32 15 76.39 10 23.67 233 6.73 
Total3,505 1.65 15 76.39 10 23.67 3,653 1.97 
Average NYMEX Price2.10 73.78 
Average Realized Price
  (including realized derivatives)
2.36 84.58 23.67 2.67 
Three Months Ended June 30, 2022
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,957 6.46 — — — — 1,957 6.46 
Haynesville1,643 6.60 — — — — 1,643 6.60 
Eagle Ford130 7.23 50 111.01 16 42.56 525 13.63 
Total3,730 6.55 50 111.01 16 42.56 4,125 7.43 
Average NYMEX Price7.17 108.41 
Average Realized Price
  (including realized derivatives)
4.03 69.46 42.56 4.65 
Six Months Ended June 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,901 2.52 — — — — 1,901 2.52 
Haynesville1,570 2.32 — — — — 1,570 2.32 
Eagle Ford106 2.11 34 76.72 13 25.54 389 8.19 
Total3,577 2.42 34 76.72 13 25.54 3,860 3.01 
Average NYMEX Price2.76 74.96 
Average Realized Price
  (including realized derivatives)
2.55 70.67 25.54 3.08 
Six Months Ended June 30, 2022
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,706 5.70 — — — — 1,706 5.70 
Haynesville1,634 5.54 — — — — 1,634 5.54 
Eagle Ford129 5.65 51 102.84 16 41.84 531 12.53 
Powder River Basin20 5.45 95.18 53.96 51 10.66 
Total3,489 5.62 55 102.30 17 42.82 3,922 6.62 
Average NYMEX Price6.06 101.35 
Average Realized Price
  (including realized derivatives)
3.59 67.38 42.82 4.32 



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CAPITAL EXPENDITURES ACCRUED (unaudited)
Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
($ in millions)
Drilling and completion capital expenditures:
Marcellus$115 $129 $233 $186 
Haynesville254 197 513 380 
Eagle Ford90 136 213 179 
Powder River Basin— — — 22 
Total drilling and completion capital expenditures459 462 959 767 
Non-drilling and completion - field28 29 52 41 
Non-drilling and completion - corporate18 20 38 42 
Total capital expenditures$505 $511 $1,049 $850 
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NON-GAAP FINANCIAL MEASURES

As a supplement to the financial results prepared in accordance with U.S. GAAP, Chesapeake’s quarterly earnings releases contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Net Debt. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. Management believes these adjusted financial measures are a meaningful adjunct to earnings and cash flows calculated in accordance with GAAP because (a) management uses these financial measures to evaluate the company’s trends and performance, (b) these financial measures are comparable to estimates provided by certain securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items.

Chesapeake's definitions of each non-GAAP measure presented herein are provided below. Because not all companies use identical calculations, Chesapeake’s non-GAAP measures may not be comparable to similarly titled measures of other companies.

Adjusted Net Income: Adjusted Net Income is defined as net income (loss) available to common stockholders adjusted to exclude unrealized (gains) losses on natural gas and oil derivatives, gains on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Chesapeake believes that Adjusted Net Income facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Net Income should not be considered an alternative to, or more meaningful than, net income (loss) available to common stockholders as presented in accordance with GAAP.

Adjusted Diluted Earnings Per Common Share: Adjusted Diluted Earnings Per Common Share is defined as diluted earnings (loss) per common share adjusted to exclude the per diluted share amounts attributed to unrealized (gains) losses on natural gas and oil derivatives, gains on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Chesapeake believes that Adjusted Diluted Earnings Per Common Share facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Diluted Earnings Per Common Share should not be considered an alternative to, or more meaningful than, earnings (loss) per common share as presented in accordance with GAAP.

Adjusted EBITDAX: Adjusted EBITDAX is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration expense, unrealized (gains) losses on natural gas and oil derivatives, separation and other termination costs, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results. Adjusted EBITDAX is presented as it provides investors an indication of the company's ability to internally fund exploration and development activities and service or incur debt. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

Free Cash Flow: Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures. Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders. Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results. Adjusted Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders and is used to determine Chesapeake's quarterly variable dividend. Adjusted Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

Net Debt: Net Debt is defined as GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents. Net Debt is useful to investors as a widely understood measure of liquidity and leverage, but this measure should not be considered as an alternative to, or more meaningful than, total debt presented in accordance with GAAP.

7



RECONCILIATION OF NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED NET INCOME (unaudited)
($ in millions)Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
Net income available to common stockholders (GAAP)$391 $1,237 $1,780 $473 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives78 (532)(1,041)1,006 
Separation and other termination costs— — 
Gains on sales of assets(472)(21)(807)(300)
Other operating expense, net16 15 47 
Other(9)(2)(15)(15)
Tax effect of adjustments(a)
93 31 427 (46)
Adjusted net income (Non-GAAP)$92 $729 $362 $1,165 
(a)
The Current Quarter and Current Period include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%. The Prior Quarter and Prior Period include a tax effect attributed to the reconciling adjustments using blended rates of 5.8% and 6.2%, respectively.
RECONCILIATION OF EARNINGS PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)
Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
$/Share$/Share$/Share$/Share
Earnings per common share (GAAP)$2.93 $9.75 $13.27 $3.82 
Effect of dilutive securities(0.20)(1.48)(0.91)(0.57)
Diluted earnings per common share (GAAP)$2.73 $8.27 $12.36 $3.25 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives0.54 (3.57)(7.24)6.91 
Separation and other termination costs0.02 — 0.02 — 
Gains on sales of assets(3.30)(0.14)(5.60)(2.06)
Other operating expense, net0.06 0.11 0.11 0.32 
Other(0.06)(0.01)(0.11)(0.10)
Tax effect of adjustments(a)
0.65 0.21 2.97 (0.32)
Adjusted diluted earnings per common share (Non-GAAP)$0.64 $4.87 $2.51 $8.00 
(a)
The Current Quarter and Current Period include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%. The Prior Quarter and Prior Period include a tax effect attributed to the reconciling adjustments using blended rates of 5.8% and 6.2%, respectively.

8


RECONCILIATION OF NET INCOME TO ADJUSTED EBITDAX (unaudited)
Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
($ in millions)
Net income (GAAP)$391 $1,237 $1,780 $473 
Adjustments:
Interest expense22 36 59 68 
Income tax expense127 77 531 31 
Depreciation, depletion and amortization376 451 766 860 
Exploration15 12 
Unrealized (gains) losses on natural gas and oil derivatives78 (532)(1,041)1,006 
Separation and other termination costs— — 
Gains on sales of assets(472)(21)(807)(300)
Other operating expense, net16 15 47 
Other(17)(2)(23)(15)
Adjusted EBITDAX (Non-GAAP)$524 $1,269 $1,298 $2,182 

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)
Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
($ in millions)
Net cash provided by operating activities (GAAP)$515 $909 $1,404 $1,762 
Cash capital expenditures(530)(415)(1,027)(759)
Free cash flow (Non-GAAP)(15)494 377 1,003 
Cash paid for acquisition costs— — — 23 
Cash contributions to investments(49)— (88)— 
Free cash flow associated with divested assets(a)
(26)— (138)— 
Adjusted free cash flow (Non-GAAP)$(90)$494 $151 $1,026 
(a)In March and April of 2023, we closed two divestitures of certain Eagle Ford assets. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction.

RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)
($ in millions)June 30, 2023
Total debt (GAAP)$2,036 
Premiums and issuance costs on debt(86)
Principal amount of debt1,950 
Cash and cash equivalents(903)
Net debt (Non-GAAP)$1,047 
9
v3.23.2
Cover Page
Aug. 01, 2023
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date Aug. 01, 2023
Entity Registrant Name CHESAPEAKE ENERGY CORPORATION
Entity Incorporation, State or Country Code OK
Entity File Number 1-13726
Entity Tax Identification Number 73-1395733
Entity Address, Address Line One 6100 North Western Avenue
Entity Address, City or Town Oklahoma City
Entity Address, State or Province OK
Entity Address, Postal Zip Code 73118
City Area Code (405)
Local Phone Number 848-8000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000895126
Amendment Flag false
Common Stock, $0.01 par value per share  
Entity Information [Line Items]  
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol CHK
Security Exchange Name NASDAQ
Class A Warrants to purchase Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Class A Warrants to purchase Common Stock
Trading Symbol CHKEW
Security Exchange Name NASDAQ
Class B Warrants to purchase Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Class B Warrants to purchase Common Stock
Trading Symbol CHKEZ
Security Exchange Name NASDAQ
Class C Warrants to purchase Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Class C Warrants to purchase Common Stock
Trading Symbol CHKEL
Security Exchange Name NASDAQ

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