Chesapeake Plans to Cut Drilling Costs by $900M
Reuters - Chesapeake Energy Corp said it planned to cut drilling and well-completion costs by nearly $900 million in 2014 after reporting quarterly results that missed analysts' estimates.
The No.2 U.S. natural gas producer, whose shares fell 3 percent in premarket trading, invested about $5.5 billion in drilling and completion activities in 2013.
Chesapeake said earlier this month it would cut spending by 20 percent this year and sell assets to plug a $1 billion gap between operating cash flow and capital expenditure.
The company said on Wednesday fourth-quarter revenue rose 28 percent to $4.54 billion, missing the average analyst estimate of $4.86 billion.
Daily production rose 2 percent to average 665,100 barrels of oil equivalent in the quarter ended Dec.31.
A planned reduction in well-connections during the quarter and severe weather in the United States in October and December constrained production.
Chesapeake swung to a net loss of $159 million, or 24 cents per share, after it recorded charges related to reducing its debt and simplifying its balance sheet.
Excluding some charges, adjusted profit was 27 cents per share.
Analysts on average had expected earnings of 41 cents per share, according to Thomson Reuters I/B/E/S.
Average production expenses inched up 2 percent from the third quarter, while general and administrative expenses rose 5 percent.
Chesapeake's shares rose 41 percent in the year up to Tuesday's close of $26.94 on the New York Stock Exchange.