Quantcast

Chesapeake (CHK) Posts Strong Q1 Earnings on Higher Output


Shutterstock photo

Chesapeake Energy Corporation CHK reported strong first-quarter 2018 earnings, courtesy of higher oil equivalent production and price realizations. As a result, in the premarket trading , the stock gained more than 3%.

Earnings per share (excluding special items) of 34 cents surpassed the Zacks Consensus Estimate of 25 cents and the year-ago 23 cents.

Total revenues fell to $1,243 million from $1,469 million a year ago. The top line also fell shy of the Zacks Consensus Estimate of $1,297 million.

Operational Performance

Chesapeake's production in the reported quarter was approximately 50 million barrels of oil equivalent (MMBoe), reflecting a year-over-year increase of 4.2%. Production consisted of approximately 8 million barrels (MMbbls) of crude (flat year over year), 222 billion cubic feet (bcf) of natural gas (up 5.2%) and 5 MMbbls of NGL (flat).

Oil equivalent realized price - excluding unrealized gains (losses) on derivatives - in the reported quarter was $27.31 per barrel of oil equivalent, up 13.5% year over year.

Total capital expenditure increased to $611 million from $576 million in the first quarter of 2017.

On the cost front, quarterly production expenses increased 3.5% year over year to $2.94 per Boe.

Expenses

Total first-quarter 2018 operating expenses were $2,211 million, down almost 12% year over year.

Financials

At the end of the first quarter, Chesapeake had cash balance of $4 million. Net long-term debt totaled $9,325 million.

The company could lower its long-term debt by roughly $581 million. This was possible as Chesapeake managed to generate record net quarterly cashflow of $609 million - the most in roughly three years.

Q1 Price Performance

During first-quarter 2018, Chesapeake lost 23.8% compared with the  industry's  decline of 4.1%. 

Guidance

Chesapeake's production guidance for 2018 is maintained at the range of 515,000-550,000 Boe per day. Moreover, the capital budget projection for 2018 has been reiterated at $1,975-$2,375 million.

Zacks Rank & Key Picks

Chesapeake carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are Baytex Energy Corp. BTE , W&T Offshore, Inc. WTI and Canadian Natural Resources Limited CNQ . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see  the complete list of today's Zacks #1 Rank stocks here .   

Baytex managed to beat the Zacks Consensus Estimate in the last three quarters.

W&T Offshore, Inc. will likely post earnings growth of 7.1% in 2018.

Canadian Natural is expected to see year-over-year earnings growth of 151.1% in 2018.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.  

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report

Baytex Energy Corp (BTE): Free Stock Analysis Report

Chesapeake Energy Corporation (CHK): Free Stock Analysis Report

W&T Offshore, Inc. (WTI): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: CNQ , BTE , CHK , WTI



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?