Chesapeake Energy Corp. CHK reported adjusted first-quarter 2015 earnings of 11 cents per share, beating the Zacks Consensus Estimate of 2 cents. The reported figure, however, decreased from the year-earlier profit of 59 cents a share.
Quarterly revenues decreased to $2,760.0 million from $5,046.0 million a year ago. The top line also surpassed the Zacks Consensus Estimate of $1,193.0 million.
Operational Performance
Chesapeake’s daily production for the reported quarter averaged approximately 68.6 million barrels of oil equivalent (MMBoe), reflecting a year-over-year increase of 14%.
Average daily production consisted of approximately 121,900 barrels (bbls) of oil, 2.9 billion cubic feet (bcf) of natural gas and 75,800 bbls of natural gas liquids (NGLs), representing year-over-year increases of 17%, 12% and 19%, respectively.
Oil equivalent realized price in the reported quarter was $14.96 per Boe, down from $35.35 in the year-earlier quarter. Average realizations for natural gas were $1.61 per Mcf compared with $3.86 per Mcf in the year-earlier quarter. Oil was sold at $41.16 per barrel, down from the year-ago price of $93.60 per barrel. NGL was sold for $6.99 per barrel versus $29.23 in the year-ago quarter.
On the cost front, quarterly production expenses were $4.84 per Boe, reflecting an increase of 2% year over year.
Financials
At the end of the quarter, Chesapeake had a cash balance of $2,907 million. The debt balance stood at $10,623 million, representing a debt-to-capitalization ratio of 37.0%.
2015 Guidance
The company expects production in the range of 233–237 MMBoe/d, up 1–3% from 2014, after adjusting for asset sales. Of the total, crude oil is estimated to be 38.5–39.5 MMBoe, natural gas is estimated at 1,025–1,040 Bcf and NGL is likely to be 23.5–24.5 MMBoe.
Chesapeake expects capital expenditure in the range of $3,475–3,975 million.
Zacks Rank
Chesapeake currently carries a Zacks Rank #3 (Hold). Better ranked players in the energy sector include Sprague Resources LP SRLP, Suburban Propane Partners LP SPH and Independence Contract Drilling Inc. ICD. All these stocks sport a Zacks Rank #1 (Strong Buy).
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