Chesapeake earnings rise to $467M

Chesapeake Energy Corp. reported earnings of $467 million in the second quarter.
BY JAY F. MARKS jmarks@opubco.com Published: July 29, 2011
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Chesapeake Energy Corp. on Thursday reported second-quarter earnings of $467 million, or 68 cents a share, up from $235 million, or 37 cents a share, in the same period of 2010.

Chesapeake's quarterly production was up 9 percent to an average of 3.049 billion cubic feet of natural gas equivalent per day, despite the sale of its holdings in Arkansas' Fayetteville Shale to BHP Billiton in March and another volumetric production payment transaction in May.

That production consisted of 2.575 billion cubic feet of natural gas and 79,033 barrels of oil and natural gas liquids. Chesapeake's liquids production was up 62 percent before adjustments for asset sales, a result of the company's increased focus on oil.

Chesapeake's proved reserves decreased by 4 percent to 16.5 trillion cubic feet of natural gas equivalent in the first half of 2011.

Chesapeake continued the industry's most active drilling program through the first six months of the year, drilling 759 wells and participating in an additional 708 wells. The company's drilling success rate was 98 percent for Chesapeake-operated wells and 99 percent for nonoperated wells.

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Also ...

Company touts

new oil play

Chesapeake Energy Corp. pulled back the curtain Thursday on a major new liquids-rich discovery in eastern Ohio.

Drilling in Ohio's Utica Shale over the past two years has revealed a play that Chesapeake estimates could be worth up to $20 billion to the company.

Chesapeake has amassed an industry-leading 1.25 million net acres in the Utica Shale.

The company has drilled six horizontal and nine vertical wells in the play, but its data set includes about 2,000 well logs and 3,200 feet of proprietary core samples.

Chesapeake's analysis indicates the play is similar to the Eagle Ford Shale in south Texas, with better economic potential.

Chesapeake has five rigs active in the Utica Shale as it evaluates and develops its leasehold. The company plans to increase its rig count to eight by year's end.

Company officials believe the play will support a drilling effort of at least 40 rigs by the end of 2014.

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