Chesapeake Energy Corporation reported financial and operational results for the 2016 second quarter. Revenues declined by 54% year over year.
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This is primarily due to a decrease in the average realized commodity prices received for its production, unrealized losses from oil and natural gas derivatives and a decrease in the average realized commodity prices received for its marketing operations.
Average daily production for the 2016 second quarter of approximately 657,100 barrels of oil equivalent (boe) consisted of approximately 90,500 barrels (bbls) of oil, 2.960 billion cubic feet (bcf) of natural gas and 73,200 bbls of natural gas liquids (NGL).
As a result of the company's strong production through the first six months of 2016, Chesapeake has raised its full-year 2016 production guidance by 3% (using midpoints) from 605,000 to 635,000 boe per day to a new range of 625,000 to 650,000 boe per day.
Chesapeake's cash expenses continue to decline due to its focus on cost discipline. Average production expenses during the 2016 second quarter were $3.05 per boe. G&A expenses (including stock-based compensation) during the 2016 second quarter were $1.02 per boe.
Combined production and G&A expenses (including stock-based compensation) during the 2016 second quarter were $4.07 per boe, a decrease of 25% year over year and 2% from the 2016 first quarter.
Chesapeake reported a net loss available to common stockholders of $1.792 billion, or $2.48 per share, while the company's ebitda for the 2016 second quarter was $(1.394) billion.
The primary drivers of the net loss were a noncash impairment of the carrying value of Chesapeake's oil and natural gas properties of approximately $1.045 billion, largely resulting from decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices as of June 30, 2016, as compared to March 31, 2016, and unrealized hedging losses of approximately $544 million.
Adjusting for these and other items that are typically excluded by securities analysts, the 2016 second quarter adjusted net loss available to common stockholders was $145 million, or $0.14 per common share, while the company's adjusted ebitda was $252 million in the 2016 second quarter.
Chesapeake's total capital investments were approximately $456 million during the 2016 second quarter, compared to approximately $957 million in the 2015 second quarter, as summarized in the table below.
While the company has reiterated its total capital investments program for 2016 of approximately $1.3 to $1.8 billion, it now expects to be at the higher end of its current guidance range due to additional drilling and completion activity as a result of efficiency gains and an acquisition of additional working interests in the Haynesville Shale. ■