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Market

Chesapeake Energy Corporation (NYSE:CHK)’s Core Assets Delivered Growth

May 21, 2014 by Melissa Michaels in Market with 0 Comments

Northern, WI 05/21/2014 (gdpwatch) – Chesapeake Energy Corporation (NYSE:CHK) reported first quarter results of 2014 with higher net income of $466 million due to increasing production of across all businesses.

Core assets increased the production capacity

During 1Q2014, Chesapeake Energy Corporation (NYSE:CHK) increased the overall production capacity with 20% YoY in average daily oil production, 63% YoY increase in average daily NGL production and 4% YoY increase in natural gas production. In addition, higher realized natural gas price increased the overall revenue by 47% to $5 billion from $3.4 billion in 1Q2013.

Lower per unit production costs and decreasing operating expenses improved the adjusted EBITDA by 34% to $1.52 billion compared to $1.13 billion in 1Q2013. Despite the higher interest expenses, Chesapeake reported adjusted net income of was $405 million and adjusted EPS of $0.59 during the period (1Q2013: $183 million with adjusted EPS).

Cash flow growth and Capital efficiency

During the period, Chesapeake Energy Corporation (NYSE:CHK) posted 37% YoY increase in operating cash flow to $1.614 billion and total capital expenditures of $850 million, which includes drilling and completion capital spending of ~$729 million. So, Chesapeake’s free cash flow for the period was ~$764 million. Lower cash used in investing and financing activities improved the Company’s ending cash balance to $1 billion.

Chesapeake also has strong liquidity position with total debt of $12 billion and shareholder’s equity of $13.3 billion as of March 31, 2014. So, the debt to capitalization ratio for the period was 39%.

Long-term outlook

Chesapeake continues to pursue growth opportunities while focusing on high-grade assets that will provide profitable growth with increasing cash flow and will reduce the financial complexity while lowering the leverage.

So, Chesapeake Energy Corporation (NYSE:CHK) increased the capital expenditure to $5-$5.4 billion to meet the 9-12% increase in total production and will generate an operating cash flow of $5.5-$5.7 billion in FY2014.

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About Melissa Michaels

Melissa Michaels joined the NBC Connecticut news team in October 2007. Monica began her career as a general assignment reporter for WCTV in Tallahassee, Florida. During her career, she's covered big stories like the Joseph Smith murder trial. The trial received national attention after a car wash surveillance tape of Smith abducting 12 year old Carlie Brucia became prosecutor's main piece of evidence against him. She contributed to news coverage that gave the station several AP awards, including best continuing coverage.

View all posts by Melissa Michaels →

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