Sales, oil production boost Chesapeake profits

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.