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Sales, oil production boost Chesapeake profits

Chesapeake Energy Corp. profits nearly doubled in the second quarter largely because of asset sales.
by Adam Wilmoth Published: August 7, 2012

Chesapeake Energy Corp. profits nearly doubled in the second quarter largely because of asset sales and increased oil production, the Oklahoma City energy company said Monday.

Chesapeake posted a profit of $929 million, up from $467 million in the second quarter of 2011. The gain translates into a net income of $1.29 per share, up from 68 cents a share in the year-ago period. Revenue improved to almost $3.39 billion in the quarter, up 2 percent from almost $3.2 billion one year ago.

Adjusting for one-time items — including a $584 million profit on the sale of its stake in the former Chesapeake Midstream Partners — the company posted profits of $3 million in the second quarter, down from $528 million one year ago. On a per-share basis, the adjusted net income translates into a profit of 6 cents a share, down from 76 cents in the year-ago period.

Chesapeake shares added 50 cents to $18.20 per share as of 5 p.m. in after-hours trading Monday. The stock price closed down 19 cents at $17.70 before the earnings numbers were released.

“We are taking aggressive and focused actions to increase cash flow and net asset value per share while also reducing long-term debt as we continue our ongoing transformation to a more balanced asset base between higher-margin liquids and lower-margin natural gas,” Chesapeake CEO Aubrey McClendon said in a statement Monday. “We are prudently deploying our capital as we focus on developing and harvesting the 10 core plays in which Chesapeake has built a No. 1 or No. 2 position.”

Chesapeake's daily production improved to 3.8 billion cubic feet of natural gas equivalent, up 25 percent from 3.05 billion cubic feet in the year-ago period. Production in the most recent quarter was 79 percent natural gas, 8 percent natural gas liquids and 13 percent oil.

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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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