Chesapeake Energy Corp. (CHK) swung to a first-quarter loss on
steep derivatives loss and a sharp drop in revenue as energy prices
declined, while production increased from a year ago.
Shares fell 3.4% to $32.10 in after-hours trading Monday as the
top line missed analysts' expectations, although the adjusted
profit exceeded their estimates.
The second-largest U.S. natural-gas producer, after Exxon Mobil
Corp. (XOM), has said it expects the market, which has seen prices
struggle due to oversupply, will recover through a combination of
higher demand and lower production. Prices have been unable to
stage a rally as natural-gas producers unlocked new reserves from
unconventional shale gas drilling in the U.S.
Meanwhile, Chesapeake has said it intends to shift its capital
spending toward finding and producing oil, and plans to increase
its output to 250,000 barrels a day in 2015 from the 30,000 it
produced daily in 2009. The company also agreed to acquire Bronco
Drilling Co. (BRNC) for about $315 million as it looks to increase
its rig count.
Chesapeake reported a loss of $162 million, or 32 cents a share,
compared with a prior-year profit of $738 million, or $1.14 a
share. Excluding derivative impacts and other items, earnings fell
to 75 cents from 82 cents. Revenue slid 42% to $1.61 billion.
Analysts polled by Thomson Reuters had expected a profit of 70
cents on revenue of $2.68 billion.
The average realized price fell 16% for gas and was down 6.6%
for oil and natural-gas liquids. Natural-gas production climbed
16%.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com