By Austen Hufford

Chesapeake Energy Corp. said its fourth-quarter loss narrowed amid lower costs that helped offset a drop in revenue on reduced production and lower commodities prices.

Still, shares rose 3% to $6.08 in premarket trading as the results weren't as bad as analysts feared.

Results were hurt by the decrease in commodity prices and lower production volumes as well as increased unrealized hedging losses.

In all for the quarter ended Dec. 31, Chesapeake reported a loss of $741 million, or 84 cents a share, compared with a year-earlier loss of $2.23 billion, or $3.36 a share. The prior period included a $2.83 billion impairment charge. Excluding that and and other items, adjusted per-share earnings were 7 cents, compared with a year-earlier loss of 19 cents. Revenue dropped 24% to $2.02 billion.

Analysts polled by Thomson Reuters expected per-share earnings of 7 cents and revenue of $2.08 billion.

With cheaper energy prices, Chesapeake has sharply reduced its workforce and shrunk its drillable land portfolio.

Production expenses per barrel of oil produced fell 17% as the average realized oil price fell 26%. Total production decreased 13%.

At the end of 2016, Chesapeake's debt principal balance was about $10 billion, compared with $9.7 billion at the end of 2015. So far this year, Chesapeake has reduced its debt principal balance by about $901 million.

Since Dec. 31, 2015, Chesapeake has cut the principal amount of debt due in 2017 and 2018 by about 97%, from $2.77 billion to $77 million.

Earlier this month, a federal judge ruled against Chesapeake bondholders who sued the company for excluding them from a $3.8 billion debt swap they say harmed the value of their debt.

--Ezequiel Minaya contributed to this article.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

February 23, 2017 08:51 ET (13:51 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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