Chesapeake Energy Corp. performed better than analysts expected during the third quarter even as a $5.4 billion writedown wiped out all its profits and the sustained drop in energy prices means more writedowns are coming.
Chesapeake posted a net loss of $4.7 billion, or $7.08 a share, compared with a profit of $662 million, or 26 cents, a year earlier, the Oklahoma City-based company said in a statement on Wednesday. Excluding one-time items such as the writedown, the 5-cent-a-share result was 9 cents better than the average 14-cent loss of 29 analysts’ estimates compiled by Bloomberg.
The third-quarter writedown of Chesapeake’s oil and gas fields exceeded the company’s $5.1 billion market value and brought the driller’s total impairments for the first nine months of 2015 to more than $15 billion. The company expects additional material writedowns in the current quarter and said in a public filing that they will continue as long as energy prices remain depressed.
Chesapeake, the largest U.S. natural gas producer after Exxon Mobil Corp., joined the likes of Royal Dutch Shell Plc, Occidental Petroleum Corp. and Whiting Petroleum Corp. as the industry racks up tens of billions in impairment charges to account for the dwindling value of their oil and gas still trapped below ground. Last week alone more than $19 billion in writedowns were reported, led by Shell’s $8.2 billion impairment.Click here to continue reading.
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