Chesapeake Energy Corporation (CHK – Free Report) reported strong first-quarter 2018 earnings, courtesy of higher oil equivalent production and price realizations. As a result, in the premarket trading, the stock gained more than 3%.
Earnings per share (excluding special items) of 34 cents surpassed the Zacks Consensus Estimate of 25 cents and the year-ago 23 cents.
Total revenues fell to $1,243 million from $1,469 million a year ago. The top line also fell shy of the Zacks Consensus Estimate of $1,297 million.
Operational Performance
Chesapeake’s production in the reported quarter was approximately 50 million barrels of oil equivalent (MMBoe), reflecting a year-over-year increase of 4.2%. Production consisted of approximately 8 million barrels (MMbbls) of crude (flat year over year), 222 billion cubic feet (bcf) of natural gas (up 5.2%) and 5 MMbbls of NGL (flat).
Oil equivalent realized price — excluding unrealized gains (losses) on derivatives — in the reported quarter was $27.31 per barrel of oil equivalent, up 13.5% year over year.
Total capital expenditure increased to $611 million from $576 million in the first quarter of 2017.
On the cost front, quarterly production expenses increased 3.5% year over year to $2.94 per Boe.
Expenses
Total first-quarter 2018 operating expenses were $2,211 million, down almost 12% year over year.
Financials
At the end of the first quarter, Chesapeake had cash balance of $4 million. Net long-term debt totaled $9,325 million.
The company could lower its long-term debt by roughly $581 million. This was possible as Chesapeake managed to generate record net quarterly cashflow of $609 million — the most in roughly three years.
Q1 Price Performance
During first-quarter 2018, Chesapeake lost 23.8% compared with the industry’s decline of 4.1%.
Guidance
Chesapeake’s production guidance for 2018 is maintained at the range of 515,000-550,000 Boe per day. Moreover, the capital budget projection for 2018 has been reiterated at $1,975-$2,375 million.
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