Chesapeake Energy Corporation (CHK - Free Report) reported second-quarter 2019 loss per share (excluding special items) of 10 cents, wider than the Zacks Consensus Estimate of loss of 7 cents. In the year-ago quarter, the company reported a profit of 15 cents a share.
Operating revenues amounted to $1,454 million, up from $982 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $1,163 million.
The bottom line has been affected by lower natural gas production and a decline in commodity price, partially offset by record quarterly oil volumes.
Chesapeake’s production in the reported quarter was approximately 45 million barrels of oil equivalent (MMBoe), down from 48 MMBoe a year ago. The total production comprised 11 million barrels (MMbbls) of oil (up 38% year over year), 185 billion cubic feet of natural gas (down 12%) and 3 MMbbls of natural gas liquids (NGLs) (down 40%). Importantly, the daily oil production of 122 MBbl during the June quarter represents the highest volume of crude produced in any quarter by the upstream energy player.
Oil equivalent realized price — exclusive of unrealized gains (losses) on derivatives — was $26.25 per barrel of oil equivalent (Boe), increasing from $23.82 in the year-ago quarter. Oil price rose to $61.44 per barrel from $57.16 in the year-ago quarter. However, natural gas prices declined to $2.48 per thousand cubic feet from the year-ago level of $2.64. Moreover, average sales price of NGLs was recorded at $13.43 per barrel in the quarter compared with $24.97 a year ago.
Total operating costs in the second quarter declined to $2,108 million from $2,449 million in the prior-year period. However, quarterly production expenses per Boe increased to $3.68 from $2.86 in the year-ago period.
Total capital expenditure increased to $559 million in the second quarter from $530 million in the year-ago period, primarily due to a rise in initial drilling and completion capital spending.
At the end of the quarter under review, Chesapeake had a cash balance of $4 million. Net long-term debt was $9,701 million, leading to a debt-to-capitalization ratio of 69.6%.
The company issued its updated production guidance for 2019 in the range of 484,000-505,000 Boe per day. Notably, the company maintained its total capital budget for 2019 at $2,105-$2,305 million.
Zacks Rank & Stocks to Consider
Chesapeake Energy currently carries a Zacks Rank #4 (Sell). Meanwhile, a few better-ranked players in the energy space include World Fuel Services Corporation (INT - Free Report) , Delek Logistics Partners, L.P. (DKL - Free Report) and TC PipeLines, LP (TCP - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
World Fuel beat the Zacks Consensus Estimate in each of the prior four quarters, the average positive earnings surprise being 16.4%.
Delek Logistics is likely to see earnings growth of 4.9% through 2019.
TC PipeLines has an average positive earnings surprise of 12.6% for the past four quarters.
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