Another strong quarter was reported by Chesapeake Energy as it had $1.3 billion or $9.60 per diluted share in net income.
The Oklahoma City’s adjusted net income was $270 million or $1.87 per share during the first quarter of the year, according to the company announcement. It also said it delivered adjusted EBITDAX of $774 million and $241 million in adjusted free cash flow.
“We delivered another strong quarter as we remain focused on executing our disciplined capital program, maximizing returns, delivering sustainable free cash flow, and returning cash to shareholders through our peer-leading dividend and buyback programs,” stated Nick Dell’Osso, Chesapeake’s President and Chief Executive Officer.
“Behind the premium rock, returns and runway of our Marcellus and Haynesville positions our confidence in our long-term outlook remains unchanged,” he added.
During the first quarter of 2023, Chesapeake generated $889 million of operating cash flow and had $130 million of cash on hand with zero dollars drawn on its credit facility at quarter-end. Chesapeake plans to pay its base and variable dividend on June 6, 2023, to shareholders of record at the close of business on May 18, 2023.
Through April 30, 2023, Chesapeake repurchased approximately one million shares of its common stock for approximately $80 million at an average price of $76.02 per share. Chesapeake has approximately $850 million remaining under its share repurchase program and, in total, has repurchased approximately 12.7 million shares of its common stock at a cost of approximately $1.15 billion under its current $2 billion authorization.
First quarter net production was approximately 4,069 mmcfe per day (90% natural gas and 10% total liquids), utilizing an average of 14 rigs to drill 60 wells and placed 53 wells on production.
Chesapeake is currently operating 13 rigs including five in the Marcellus, six in the Haynesville, and two in the Eagle Ford. As previously announced, the company plans to release both rigs in the Eagle Ford in the second quarter as well as releasing one rig from the Haynesville and the Marcellus in the third quarter.
The company is currently operating four frac crews including one in the Marcellus, two in the Haynesville and one in the Eagle Ford. As previously announced, the company will drop one frac crew from the Haynesville in the second quarter. The company expects to drill 35 to 45 wells and place 30 to 35 wells on production in the second quarter of 2023. The company’s operating plan remains flexible and is prepared for further adjustments, higher or lower, based on market conditions.
On its continued path to Be LNG Ready, the company entered into a Heads of Agreement (HOA) with Gunvor Group Limited. Under the agreement, Chesapeake will supply up to 2 million tonnes of LNG per annum to Gunvor with the purchase price indexed to the JKM. Chesapeake and Gunvor are working to jointly select the most optimal liquefaction facility in the United States to liquify the gas produced by Chesapeake and deliver LNG to Gunvor on a Free-on-Board basis with a target start date in 2027.