Chesapeake Energy Corp | $CHK Stock | Higher Oil Prices and Increased Production Push Profit Up

Chesapeake Energy

Chesapeake Energy Corp (NYSE: CHK)


Chesapeake Energy released its first-quarter earnings report on Wednesday right before the markets opened. During the first three months of 2018 the company made a profit of $268 million.

In addition, the energy giant increased its production capacity and managed to cut down its operating costs. Following the announcement of the results, Chesapeake saw its stock gain more than 3% in pre-market trade.

CHK Earnings & Outlook

2018 first quarter revenue from natural gas liquids, oil and natural gas dropped to $1.24 billion from $1.47 billion in the same quarter last year.

The revenue also failed to beat the consensus $1.29 billion estimate of analysts, and marketing revenue slid to $1.25 billion from the year-ago figure of $1.28 billion. The company said that net cash flow, which includes $609 million asset sale proceeds, is the highest they have ever posted in any quarter in more than 3 years.  

Chesapeake reported net income of $294M and net income available to shareholders of common stock of $268M, or 29 cents per diluted share. Total capital expenditures stood at $611 million during the period, compared to the $576 million figure in the year-ago period.

Chesapeake CEO Comments

The Chief Executive Officer of Chesapeake, Doug Lawler made the following comments on the company’s earnings: “The strength of our operations and improved cost structure, coupled with higher realized prices, resulted in our best quarterly financial performance in over three years. For the second consecutive quarter, we recorded significant growth in our earnings and cash flow. Notably, our margin improvement, while aided by increases in commodity indices, was primarily driven by strong oil production and a lower cost structure, highlighting the differential profit generated beyond price impacts, and the sustainability of our improving financial performance.”

Chesapeake Energy Corporation Company Profile

Chesapeake Energy acquires, explores and develops properties for the production of natural gas liquids, oil, and natural gas from US underground reservoirs. The company’s interests in natural gas includes the Marcellus Shale in Pennsylvania’s northern Appalachian Basin; Haynesville/Bossier Shales in East Texas and northwestern Louisiana. Chesapeake also has interests in natural liquids-rich resources, including the Texas’ Eagle Ford Shale; Ohio’s Utica Shale; Oklahoma’s Anadarko Basin; Wyoming’s Powder River Basin.

The company holds interests in more than 17,300 natural gas and oil wells. Its proved oil barrels as of December 2017 stood at 1.116 billion. Chesapeake also provides natural gas liquids, oil, and natural gas marketing services covering contract administration, commodity price structuring, hauling, negotiating, securing, gathering, transportation, and processing services for Chesapeake-managed wells. The company was founded in 1989 and is based in Oklahoma City. –Reuters