USA: Chesapeake Profit Climbs

Chesapeake Energy Corporation reported financial and operational results for the 2013 first quarter.

Key information related to the quarter is as follows:

• Adjusted net income per fully diluted share of $0.30 increases 67% year over year
• Adjusted ebitda of $1.134 billion increases 35% year over year
• Total production increases 9% year over year to 4.0 bcfe per day
• Oil production rises 56% year over year to 103,000 bbls per day
• Capital expenditure levels in line with or below budgeted levels
• Asset sales on track for year with $2.0 billion signed or closed to date and multiple other transactions in advanced stages of negotiation

Chesapeake reported net income available to common stockholders of $15 million, or $0.02 per fully diluted share. These results include the effects of net unrealized noncash after-tax mark-to-market losses of $94 million from the company’s hedging programs and a net after-tax charge of $83 million for employee retirement expense and other termination benefits primarily resulting from a previously announced voluntary separation program and senior management separations. Adjusting for these and other items typically not included in earnings estimates by securities analysts, Chesapeake reported adjusted net income available to common stockholders of $183 million, an increase of 95% year over year, and adjusted net income per fully diluted share of $0.30, an increase of 67% year over year.

The company reported adjusted ebitda of $1.134 billion, an increase of 35% year over year. Operating cash flow, which is cash flow provided by operating activities before changes in assets and liabilities, was $1.176 billion, an increase of 29% year over year. Additional definitions and reconciliations to comparable financial measures calculated in accordance with generally accepted accounting principles of adjusted net income available to common stockholders, operating cash flow, ebitda and adjusted ebitda are provided on pages 13-15 of this release.

Steven C. Dixon, Chesapeake’s Acting Chief Executive Officer, said, “Chesapeake is off to a strong start in 2013. We are beginning to see the benefits of our operational strategy shift from identifying and capturing new assets to developing our extensive existing assets and entering a new era of shareholder value realization.

“Our operational focus on the core of the core is enabling our drilling program to increasingly target the best reservoir rock in each of our key plays. We are capitalizing on pad drilling efficiencies wherever possible and leveraging our substantial investments in roads, well pads, gathering lines, and compression and processing facilities. As a result, we are generating more efficient production growth, stronger cash flow and better returns on capital.”

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LNG World News Staff, May 2, 2013