What Is Going On With Chesapeake Energy Corp (NYSE:CHK)?


In the month of February, Chesapeake Energy Corp (NYSE:CHK) posted operational and financial results for the fourth quarter of 2017. Doug Lawler, the Chief Executive Officer, expressed that they are extremely delighted with their fourth quarter and FY2017 performance, as they recorded significant progress toward their objectives of reducing their debt, increasing margin and cash flow generation.

The buzz

The CEO of Chesapeake expressed that FY2017 was a pivotal year for company, as they restored their production and expanded net cash offered by operations, adjusted for asset sales, increased their oil production and considerably improved their cost structure by lowering their combined production, G&A and gathering, transportation and processing expenses by around $510 million.

They further showcased the depth of their portfolio by closing on around $1.3 billion in property and asset sales and finalized additional asset sales for around $575 million that they anticipate to close by Q2 2018. The company lowered their outstanding secured term debt by around $1.3 billion, continued to eliminate legal obligations and posted the best safety and environmental performance in their firm’s history.

Lawler added that Chesapeake is well-positioned to build on its 2017 progress and accomplishments on their strategic objectives, with their 2018 guidance showcasing improvements in their cost structure, adjusted for asset sales, increased margins and net cash, and increased oil production. They anticipate to offer production increase, adjusted for asset sales, of 1% to 5% on lowered capital expenditures. The anticipated improvements in their cost structure, as well as higher NYMEX pricing and improved basis pricing differentials, led in higher forecasted YoY cash flows.

Over the preceding four years, they have fundamentally changed their business, removing operational and financial complexity, considerably improving their balance sheet, and addressing several legacy problems that have impacted past performance. Chesapeake continues to get stronger, and they consider they are well set to create considerable shareholder value in the imminent years.

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