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Chesapeake Energy Corporation's Earnings: Production and Profits Both Beat Estimates

Source: Chesapeake Energy Corporation Investor Presentation.

A look at outlook

In September, Chesapeake Energy reached its year-end exit-rate target of 730,000 barrels of oil equivalent per day. Because of that, the company remains on pace to hit its goals for the year. As the slide below notes, the company expects production to grow by 9%-12% this year even as capital spending declines from last year.

Source: Chesapeake Energy Corporation Investor Presentation.

As that slide notes, Chesapeake Energy still expects to deliver strong cash flow for the full year despite the weakness in energy prices. One of the reasons that the company believes it can still achieve these strong results is its solid hedge position. Currently, Chesapeake Energy has 72% of its natural gas production hedged in the fourth quarter along with 64% of its oil production. That will provide the company with solid protection against commodity price volatility, especially considering the fact that 71% of the company's production is natural gas, which hasn't been as weak as oil has been over the past few months.

Investor takeaway

Chesapeake Energy delivered outstanding third-quarter results considering the weakness in oil prices . Not only did the company beat earnings estimates, but it also exceeded its own production guidance. That, along with protecting a majority of its cash flow through its hedging program, sets the company up for a solid finish to the year.

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The article Chesapeake Energy Corporation's Earnings: Production and Profits Both Beat Estimates originally appeared on Fool.com.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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

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