Chesapeake Energy unveiled its fourth quarter earnings report this week showing that like other energy firms, the Oklahoma City-based company had a good quarter.
It reported net cash from operating activities of $563 million leaving Chesapeake with an unrestricted cash balance of $905 million. Net income totaled nearly $1.4 billion or $11.13 per diluted share. Adjusted net income figured out to be $308 million or $2.39 a diluted share.
Chesapeake’s adjusted EBITDAX was $687 million and adjusted free cash flow totaled $372 million. The company also had a quarter dividend of $1.7675 per common share.
“In 12 short months, we have strengthened Chesapeake’s portfolio, clarified our strategy and focused our capital and talented team on our highest return assets. We have demonstrated the strength and sustainable cash generating capability of the company, delivering over $1.2 billion in adjusted free cash flow,” stated Nick Dell‘Osso, Chesapeake’s President and Chief Executive Officer.
He said a clear dividend framework is in place and leadership anticipates a return of nearly $1 billion in cash to shareholders this year.
Upon the anticipated closing of the transaction with Chief E&D Holdings, LP and affiliates of Tug Hill, Inc. in late March 2022, the company expects its base dividend to increase from $0.4375 per share to $0.50 per share, payable in June 2022.
Chesapeake’s net production rate in the fourth quarter of 2021 was approximately 539,000 boe per day (approximately 85% natural gas and 15% total liquids), utilizing an average of 9 rigs to drill 32 wells and place 35 wells on production.
For the full year 2021, the company produced approximately 462,000 boe per day, utilizing an average of 7 rigs to drill 122 wells and place 130 wells on production. Currently, Chesapeake is operating 11 rigs including two in the Marcellus, six in the Haynesville, and three in the Eagle Ford, and the company expects to drill 40 to 50 wells and place 40 to 50 wells on production in the first quarter of 2022.
Chesapeake also revealed it expects to generate more than $2 billion in adjusted free cash flow in 2022 and more than $9 billion over the coming five years. It also anticipates paying up to $1.1 billion in total dividends this year and more than $5 billion over the next five years.