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Wednesday, August 5, 2015

Chesapeake Releases 2nd Quarter Results; Shares Dive 10%

Chesapeake released their second quarter 2015 finanical results today.  The numbers aren't pretty:
For the 2015 second quarter, Chesapeake reported a net loss available to common stockholders of $4.151 billion, or $6.27 per fully diluted share, which compares to net income available to common stockholders of $145 million, or $0.22 per fully diluted share, in the 2014 second quarter. Items typically excluded by securities analysts in their earnings estimates reduced 2015 second quarter net income by approximately $4.025 billion on an after-tax basis and are presented on Page 12 of this release. The primary source of this reduction was an impairment in 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 June 30, 2015, compared to March 31, 2015. Adjusting for this and other items, the 2015 second quarter net loss available to common stockholders was $126 million, or $0.11 per fully diluted share, which compares to adjusted net income available to common stockholders of $235 million, or $0.36 per fully diluted share, in the 2014 second quarter.
Read the whole report here.

NGI reports:
Chesapeake Energy Corp. saw its share price collapse early Wednesday after announcing it had shuttered more natural gas production in Appalachia, sharply reduced the total rig count and is prowling for buyers or partners to cope. 
CEO Doug Lawler, who helmed a one-hour conference call Wednesday to discuss second quarter results, also said he does not see any significant recovery in oil and gas prices over the medium-term. He had attempted to assuage concerned investors, who questioned high debt levels and locked-in gas transportation contracts. However, by midday, the share price had plunged by close to 10% to $ 7.21, the lowest level in more than a decade. 
The Oklahoma City producer revealed a $ 4.02 billion loss (minus $ 6.27 / share) in 2Q2015, versus profits a year ago of $ 145 million (22 cents). Excluding the one-time charges regarding the value of its onshore portfolio, losses totaled $ 126 million ( minus 11 cents / share), versus year-ago profits of $ 235 million (36 cents). Revenue fell 41% year / year to $ 3.03 billion. Operating cash flow was $ 606 million, versus $ 1.269 billion a year ago.

Lawler acknowledged that investors were questioning how the company is coping, considering its high debt levels and, for instance, high transportation costs, which were locked in place before the commodity crash.
Read that whole article here.

Chesapeake has seemingly been on shaky ground for a long time now, but hopes that things were headed in the right direction are more and more giving way to fears that the bleeding just won't stop.

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