CHESAPEAKE NET LOSS $12.5 BLN
CHESAPEAKE ENERGY CORPORATION |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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($ in millions, except per share data) |
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(unaudited) |
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Three Months Ended |
Nine Months Ended |
||||||||||||||
2015 |
2014 |
2015 |
2014 |
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REVENUES: |
|||||||||||||||
Oil, natural gas and NGL |
$ |
880 |
$ |
2,341 |
$ |
2,693 |
$ |
5,812 |
|||||||
Marketing, gathering and compression |
2,013 |
3,362 |
5,993 |
9,543 |
|||||||||||
Oilfield services |
— |
— |
— |
546 |
|||||||||||
Total Revenues |
2,893 |
5,703 |
8,686 |
15,901 |
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OPERATING EXPENSES: |
|||||||||||||||
Oil, natural gas and NGL production |
251 |
298 |
826 |
868 |
|||||||||||
Production taxes |
25 |
62 |
87 |
185 |
|||||||||||
Marketing, gathering and compression |
1,955 |
3,369 |
5,751 |
9,515 |
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Oilfield services |
— |
— |
— |
431 |
|||||||||||
General and administrative |
49 |
60 |
174 |
229 |
|||||||||||
Restructuring and other termination costs |
53 |
(14) |
39 |
12 |
|||||||||||
Provision for legal contingencies |
— |
100 |
359 |
100 |
|||||||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
488 |
688 |
1,773 |
1,977 |
|||||||||||
Depreciation and amortization of other assets |
31 |
37 |
100 |
194 |
|||||||||||
Impairment of oil and natural gas properties |
5,416 |
— |
15,407 |
— |
|||||||||||
Impairments of fixed assets and other |
79 |
15 |
167 |
75 |
|||||||||||
Net (gains) losses on sales of fixed assets |
(1) |
(86) |
3 |
(201) |
|||||||||||
Total Operating Expenses |
8,346 |
4,529 |
24,686 |
13,385 |
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INCOME (LOSS) FROM OPERATIONS |
(5,453) |
1,174 |
(16,000) |
2,516 |
|||||||||||
OTHER INCOME (EXPENSE): |
|||||||||||||||
Interest expense |
(88) |
(17) |
(210) |
(82) |
|||||||||||
Losses on investments |
(33) |
(27) |
(57) |
(72) |
|||||||||||
Net gain on sales of investments |
— |
— |
— |
67 |
|||||||||||
Losses on purchases of debt |
— |
— |
— |
(195) |
|||||||||||
Other income (expense) |
(2) |
(1) |
3 |
12 |
|||||||||||
Total Other Expense |
(123) |
(45) |
(264) |
(270) |
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INCOME (LOSS) BEFORE INCOME TAXES |
(5,576) |
1,129 |
(16,264) |
2,246 |
|||||||||||
INCOME TAX EXPENSE (BENEFIT): |
|||||||||||||||
Current income taxes |
— |
2 |
(6) |
10 |
|||||||||||
Deferred income taxes |
(937) |
435 |
(3,808) |
849 |
|||||||||||
Total Income Tax Expense (Benefit) |
(937) |
437 |
(3,814) |
859 |
|||||||||||
NET INCOME (LOSS) |
(4,639) |
692 |
(12,450) |
1,387 |
|||||||||||
Net income attributable to noncontrolling interests |
(13) |
(30) |
(50) |
(110) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE |
(4,652) |
662 |
(12,500) |
1,277 |
|||||||||||
Preferred stock dividends |
(43) |
(43) |
(128) |
(128) |
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Repurchase of preferred shares of CHK Utica |
— |
(447) |
— |
(447) |
|||||||||||
Earnings allocated to participating securities |
— |
(3) |
— |
(15) |
|||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS |
$ |
(4,695) |
$ |
169 |
$ |
(12,628) |
$ |
687 |
Chesapeake Energy Corporation (NYSE: CHK) today reported financial and operational results for the 2015 third quarter. Highlights include:
- Production averaged approximately 667,000 boe per day, an increase of 3% year over year, adjusted for asset sales
- Adjusted net loss of $0.05 per fully diluted share and adjusted ebitda of $560 million
- 2015 total production guidance increased to 670 – 680 mboe per day
- 2015 production expense and general and administrative expense guidance lowered significantly
- 2015 capital guidance reduced to $3.4 – $3.9 billion
Doug Lawler, Chesapeake's Chief Executive Officer, commented, "The many actions that we have taken this quarter, including executing new gas gathering agreements, amending our revolving credit facility, reducing complexity and commitments and lowering our business costs, have significantly increased Chesapeake's ability to create additional value. Our focus on optimizing base production and continuing to generate efficiencies in the field drove a 3% increase in production compared to last year, adjusted for asset sales. In addition, the elimination of $200 million of annualized, controllable production and general and administrative expenses represents another step in our commitment to financial discipline."
Lawler continued, "We lowered our 2015 capital guidance to $3.4 to $3.9 billion and are prepared to execute on a significantly lower capital program in 2016. While the current price environment presents many challenges for our industry, we will continue focusing on our capital and operating cost efficiency, enhancing our cash flow and financial flexibility and optimizing our base production. The power of our people, the strength of our portfolio and our operational leadership will continue to create value for Chesapeake for the long term."
2015 Third Quarter Financial Results
For the 2015 third quarter, Chesapeake reported a net loss available to common stockholders of $4.695 billion, or $7.08 per fully diluted share, which compares to net income available to common stockholders of $169 million, or $0.26 per fully diluted share, in the 2014 third quarter. Items typically excluded by securities analysts in their earnings estimates reduced 2015 third quarter net income by approximately $4.612 billion on an after-tax basis and are presented on Page 12 of this release. The primary source of this reduction was a noncash impairment of the carrying value of Chesapeake's oil and natural gas properties largely resulting from significant decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices as of September 30, 2015, compared to June 30, 2015. Adjusting for this and other items, the 2015 third quarter net loss available to common stockholders was $83 million, or $0.05 per fully diluted share, which compares to adjusted net income available to common stockholders of $251 million, or $0.38 per fully diluted share, in the 2014 third quarter.
Adjusted ebitda was $560 million in the 2015 third quarter, compared to $1.236 billion in the 2014 third quarter. Operating cash flow was $476 million in the 2015 third quarter, compared to $1.293 billion in the 2014 third quarter. The year-over-year decreases in adjusted ebitda and operating cash flow were primarily the result of lower realized oil, natural gas and natural gas liquid (NGL) prices, partially offset by higher realized hedging gains and lower production expenses, general and administrative (G&A) expenses and production taxes.
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