Chesapeake reports 1Q losses and increased debt but stronger oil production

 

(PRNewsfoto/Chesapeake Energy Corporation)

While reporting increased oil production in its expanded operations, Oklahoma City-based Chesapeake Energy also reported increased costs and a loss of $182 million from operations in the first quarter of 2019.

The $182 million loss compares to $42 millions in profits reported one year ago. Lost income before income taxes came to $335 million in the first three months of 2019.

Net income also totaled $21 million in losses for Chesapeake.

The company also reported that its principal amount of debt outstanding as of March 31, 2019 was nearly $9.978 billion, an increase from the $8.168 billion reported at the end of 2018. The increase in debt was largely a result of $1.375 billion in debt assumed when Chesapeake acquired WildHorse Energy in February of this year, according to an earnings report from Chesapeake.

. As of March 31, 2019, under the $3.0 billion Chesapeake credit facility, the company had borrowed $842 million, utilized approximately $61 million for various letters of credit and had additional borrowing capacity of approximately $2.097 billion.

Despite the losses and the increase in debt, Doug Lawler, Chesapeake’s President and Chief Executive Officer felt the company again delivered strong financial and operational results.

“We believe we will see significantly more savings in the year ahead as we fully integrate our Brazos Valley operations into Chesapeake. With our transformational oil growth and capital efficiency continuing to improve, our confidence is strong as we drive towards achieving our strategic priorities of meaningful margin enhancement, sustainable free cash flow and a net debt to EBITDAX ratio of two times.”

He said the company is still on track to deliver transformational oil growth this year. Chesapeake reported continued improvement in the Powder River Basin where there was record production in the quarter and in April of this year. The report indicated Chesapeake is on track to deliver oil growth of nearly 32 percent.

To date, Chesapeake has average oil production of nearly 109,000 Bbls a day with a year-over-year growth of 18 percent. Its average production of Barrels of oil equivalent a day is 484,000.

Click here to read report filed with the Securities and Exchange Commission.