Chesapeake Energy Corp posted a quarterly loss on Wednesday, hurt by a drop in natural gas prices and higher expenses, sending its shares down 7.2 percent in early trading.
The Oklahoma-based company sold natural gas, its main revenue generator, at an average price of $2.56 per thousand cubic feet (mcf), down from $2.88 per mcf a year earlier.
Natural gas prices declined about 4 percent in the reported quarter from a year earlier, as U.S. production reached a record high.
Chesapeake has been shifting from gas to oil and last week said it would sell all of its Ohio natural gas acreage to privately owned Encino Acquisition Partners for about $2 billion. “(The sale) will allow us to retire nearly $2 billion of outstanding debt, while the recent significant ramp in our Powder River Basin volumes position us to replace the divested Utica EBITDA within a year,” Chief Executive Officer Doug Lawler said in a statement.
Chesapeake has been shedding assets and laying off employees ever since a 2013 governance crisis led to the departure of co-founder and former Chief Executive Officer Aubrey McClendon.
The company’s average daily production in the quarter rose 0.5 percent to 530,000 barrels of oil equivalent per day in the second quarter ended June 30, while average sales price rose 13.8 percent to $25.56 per barrel of oil equivalent. Operating expenses jumped 18.2 percent.
Chesapeake last week slightly bumped up its full-year oil production forecast to a range of 31.5 million barrels of oil (mmbbls) to 33.5 mmbbls, from a prior forecast of 31 mmbbls to 33 mmbbls. The company expects natural gas production in the range of 790 billion cubic feet (bcf) to 830 bcf, compared with an earlier expectation of 825 bcf to 875 bcf.
Net loss available to shareholders was $40 million, or 4 cents per share, in the three months ended June, compared with a profit of $470 million, or 47 cents per share, a year earlier.
Reporting by: Anirban Paul in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila