Chesapeake Energy Corp. on Wednesday reported a 68 percent drop in profits, led by lower commodity prices and the cost of buying back debt.
The Oklahoma City oil and natural gas company posted a net income of $191 million, or 22 cents a share, down from $457 million, or 66 cents a share, in the year-ago quarter. Adjusting for one-time expenses, the company earned $235 million, or 36 cents a share, down from $265 million, or 51 cents a share, in the second quarter of 2013.
Adjusted earnings before interest taxes depreciation and amortization was $1.277 billion, down from $1.424 billion one year ago.
While prices slipped, production continued to grow. Chesapeake produced 63.2 million barrels of oil equivalent in the quarter, up 2.6 percent from the year-ago period. Adjusting for asset sales, Chesapeake’s production increased 13 percent on the year. Oil represents 16 percent of the company’s production, down from 17 percent one year ago.
Chesapeake raised its forecast of production by the end of the by 10,000 barrels of oil equivalent per day, or about 1.5 percent, and to more than 730,000 barrels of oil equivalent.
“Chesapeake had another strong quarter with production growth and operating performance,” CEO Doug Lawler said on a conference call with analysts Wednesday. “We continue to make foundational progress on our strategies of financial discipline and profitable and efficient growth from our high-quality assets. I’m very pleased with our continued improvements in operating efficiencies, measured by cycle time improvements, capital spending reductions and cash cost leadership.”
Chesapeake executives said the company’s sales prices were held down by an oversupply of natural gas in the Marcellus Shale region of the Northeast.