Chesapeake Energy Corp. posted a net loss of $159 million, or 24 cents a share, for the fourth quarter as it continues to transform itself into a simpler company focused on developing its assets rather than seeking new ones.
Excluding items typically not covered in analysts’ estimates, Chesapeake earned $161 million, or 27 cents a unit, which is on par with the same quarter of 2012 when the company earned $146 million, or 26 cents a share.
Even with those exclusions, Chesapeake missed analysts’ estimates by 14 cents a share.
CEO Doug Lawler still was pleased with the company’s performance as it focused on optimizing its business plan with a disciplined capital budget.
“We believe that the impact of these efforts on our capital efficiency and returns will become even more evident in 2014 as we continue to drive well performance up and well costs and per unit cash costs down,” he said. “In 2014, we plan to reduce drilling and completion costs, before drilling carry credits, by nearly $900 million, while still generating comparable production growth year over year.”
Chesapeake’s average daily production in the fourth quarter was 665,100 barrels of oil equivalent, a 2 percent increase over the same period of last year, but down slightly from the third quarter.
Lawler said Chesapeake’s fourth-quarter and full year results illustrate the company’s challenges and opportunities.
Chesapeake has long boasted one of the most impressive asset portfolios in the industry, but investors eventually tired of the company’s free-spending ways.
Lawler said Chesapeake slashed its spending by 49 percent last year, but still managed to increase its oil production by 71 percent adjusted for asset sales.
He said the company is in a different position now when it comes to asset sales.
“We will divest assets that are not core to the future of the company so long as we receive appropriate value for them,” Lawler said. “We no longer need to divest assets to survive or to fund our drilling capital program.”
Chesapeake announced this week that it is looking to sell or spinoff its oil-field service business.
Lawler said the final decision on Chesapeake Oilfield Services will depend on what captures the greatest value for shareholders.
“Beyond these sales, we have planned other tactical and strategic asset dispositions designed to further strengthen our program returns and reduce balance sheet leverage and complexity,” he said.
Chesapeake’s stock dipped $1.33 a share Wednesday to $25.61.