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Debt buybacks, energy prices trim Chesapeake Energy profits

Oklahoma City oil and natural gas company posts $191 million profit in second quarter; expects production growth to continue.
by Adam Wilmoth Published: August 6, 2014

The executives also reiterated the company’s ongoing effort to reduce debt. Chesapeake recently bought back $1.26 billion in debt from its Chesapeake Utica LLC subsidiary.

“Chesapeake is standing strong on four pillars today,” Lawler said. “We’re growing production at a double-digit annual rate, we’re demonstrating excellent capital efficiency and cost leadership, we’re reducing our financial complexity and we’re laser-focused on creating shareholder value through a variety of strategic initiatives.”

Analyst Tim Rezvan said he is not overly concerned with Chesapeake’s lower-than-expected profits.

“Any disappointment should be mitigated by a 1.5 percent increase to 2014 production guidance and 2014 exit-rate guidance of 730 mboe/d (thousand barrels of oil equivalent per day) that suggests consensus 2015 production of 732 mboe/d is likely far too conservative,” Rezvan, an analyst with Sterne Agee, said in a statement Wednesday. “We believe a muted reaction is warranted following a positive update to 2015 growth.”

by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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