Nat Gas Giant Chesapeake Revs Up in Second Quarter 2013

Oklahoma City-based natural gas powerhouse Chesapeake Energy Corporation reported Friday second-quarter 2013 adjusted earnings were $388 million, or 51 cents per share, well above the 41 cents per share consensus estimate and significantly higher than the 6 cents per share figure seen at this time last year.

Earnings were about 24 percent higher than analyst expectations, and were driven by higher production, stronger gas prices, and lower unit costs.

Revenues were 50 percent marketing, 45 percent oil and gas, and 5 percent oilfield services.

Production averaged 4.06 billion cubic feet equivalent (Bcfe), an increase of 7 percent year over year. Daily oil production increased year on year to 116,000 barrels per day. Projected full-year 2013 oil production outlook was at 38-40 million barrels, up by 1 million barrels.

“We are raising our full-year 2013 oil production guidance by 1 million barrels to 38-40 million barrels, representing a growth rate of 22 to 28 percent year over year, due to good well performance, an accelerated pace of well completions in the Eagle Ford Shale and timing of asset sales,” said Steve Dixon, Chesapeake’s chief operating officer, said in a statement.

Analysts at Oppenheimer said Chesapeake profited from the growth in oil and gas liquids from Eagle Ford, and is reducing spending.

“”New CEO Doug Lawler announced a reduction in the 2013 drilling and completion budget to $5.7 to $6 billion (from $5.75 to $6.25 billion) and net acquisitions to $300 to $350 million (from $400 million), with a goal to match spending levels with operating cash in 2014.


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