Tuesday, January 7, 2014

How is Chesapeake Doing as 2014 Starts?

From Seeking Alpha:
What will be the driving force behind Chesapeake meeting and/or exceeding its prescribed estimates? The company's shift to focus a majority of its capital on core E&P operations while significantly reducing its capital expenditures will play a key role in not only its FY2013 performance, but rather its performance over 3-5 years. For example, I think there is a very good chance the company's capital expenditure levels could meet or even fall below the $5.7 billion benchmark that was set in 2009.
The analyst writing that article feels the Utica shale will be a key part of Chesapeake's success moving forward.  This is obviously in spite of what most have stated are very underwhelming numbers from Chesapeake's Utica wells on the recently released 3rd quarter production results.
Chesapeake's Utica Operations (as of Q3 2013)As of September 30, 2013, Chesapeake Energy connected 63 wells to sales with average peak daily rate of 6.6 mmcfe/day. and drilled 377 wells that included 169 producing wells and 208 wells that were considered to be WOPL or in various other stages of completion. 
If Chesapeake wants to demonstrate increases in daily net production (of approximately 165 mmcfe/day as of September 30), a few things need to happen. For example, the number of connected wells and the number of drilled wells need to increase by at least 5% and the deadlines regarding the company's Kensington processing operations need to continue to be sufficiently met. 
Read the whole article here.

Here is Chesapeake's investor report:

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