Top Utica Shale driller Chesapeake Energy on Thursday reported a more than $1.7 billion loss for its second quarter – a significant improvement from over a year ago.
The Oklahamo-based energy company raised its production forecast for the year and said it will continue to operate a drilling rig in its Utica Shale acreage. The company has more than 600 wells in Ohio, according to the latest state figures.
Chesapeake Energy said it lost $1.75 billion, or $2.48 per share, on revenue of $1.6 billion for the quarter ending June 30. That compares to a loss of nearly $4.2 billion, or $6.27 a share, on revenue of $3.5 billion a year ago.
Chesapeake said its revenue fell by 54 compared to a year ago and it lost money in the quarter largely because of falling energy prices, noncash impairments of more than $1 billion, plus “unrealized hedging losses of approximately $544 million”.
The company, which has been struggling with heavy debt, said it has paid off about $1 billion in debt so far this year.
“Financial discipline remains our top priority, and we continue to work toward additional solutions to improve our liquidity, reduce our midstream commitments and enhance our margins,” Doug Lawler, chief executive officer, said in a statement. “With continued improvements in our operating expenses and the disposition of non-core properties, we have refined our portfolio to provide a more competitive foundation for Chesapeake. In addition, the application of new technologies, including longer laterals and enhanced completion techniques, to our extensive undeveloped acreage position provides us with a robust portfolio of development opportunities.”
Chesapeake raised its full-year 2016 production guidance by 3 percent from a range of 605,000 to 635,000 barrels of oil equivalent per day to a range of 625,000 to 650,000 barrels of oil equivalent per day.
Adjusted earnings showed a net loss of $145 million, or 14 cents per share, the company said.
The company said it will continue to sell off assets, including a portion of its Haynesville Shale properties, with total sales this year expected to be more than $2 billion.
Chesapeake said it has 10 drilling rigs; three in the Eagle Ford Shale; three in the Haynesville Shale; three in the Mid-Continent area; and one rig in the Utica Shale. Chesapeake said it plans to operate the 10 rigs through the remainder of the year and. That will result in more than 100 additional wells. Chesapeake said it will place approximately 75 additional wells in production this year.
The full earnings report is here.