Chesapeake Energy Q3 loss widened as revenue slips
Shares in Chesapeake Energy slid on Tuesday after it reported a wider-than-expected third quarter loss following declines in revenues and production.
Chesapeake Energy Corp.
$11.85
11:10 26/06/20
The adjusted net loss attributable to the company was $188.0m from the three-month period ended 30 September, compared with a loss of $8.0m during the same period last year.
This loss translated to a loss of 11 cents per share, with analysts having anticipated a 10 cents per share loss.
Revenue also missed expectations, declining by 15% to $2.06bn versus FactSet consensus of $2.12bn after marketing turnover dropped by 27.0% to $889.0m.
Oil, natural gas and natural gas liquids revenue edged 2.0% lower to $1.17bn after total production fell to 478,000 barrels of oil equivalent per day from 537,000 boe/d, while prices also fell.
The New York-listed company said its debt stood at $9.73bn at the end of the period, up from $8.17bn at the same point in 2018, and it warned that commodity price volatility could compromise its ability to comply with debt covenants.
Chesapeake said it is now targeting free cash flow and plans to reduce 2020 production and general and administrative expenses by approximately 10%.
Meanwhile, it expected capital expenses for 2020 to drop by about 30% from the $2.11bn to $2.31bn earmarked for the current year.
President and chief executive Doug Lawler said: "We expect our oil production to grow approximately 10% in the fourth quarter, compared to the third quarter, and we remain on track to meet our 2019 total production and capital expenditure guidance. Our capital efficiency improvements, expected reduction in cash costs and anticipated capital plan position us to target free cash flow in 2020."
Chesapeake Energy shares were down 13.83% at $1.34 at 1558 GMT.