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Ohio Utica Shale

Bloomberg: Higher gas prices boost Chesapeake's first quarter

By Bob Downing Published: May 1, 2013

From Bloomberg News:

By Joe Carroll

Chesapeake Energy Corp. (CHK), the U.S. natural gas producer that replaced its chief executive officer in March amid conflict-of-interest questions, swung to a higher profit than expected as gas prices rallied on strengthening demand.

Net income was $58 million, or 2 cents a share, compared with a loss of $28 million, or 11 cents, a year earlier, the Oklahoma City-based company said in a statement today. Excluding non-cash hedging losses and severance expenses, per-share profit was 5 cents higher than the average of 28 analysts’ estimates compiled by Bloomberg.

Gas futures traded in New York jumped 39 percent during the quarter as cold weather in some of the biggest U.S. cities spurred demand for the furnace fuel. Chesapeake, which pumped enough gas last year to supply one-fifth of U.S. households, replaced CEO Aubrey McClendon on March 29 after an investor revolt and boardroom overhaul failed to resurrect a languishing stock price.

“The biggest thing they got going for them is they got rid” of McClendon, Ben Dickey, chief investment officer at BSG&L Financial Services LLC in Houston, said in an interview before the results were announced. “If gas prices continue coming back, that’ll be good for them.”

The statement was released before the start of regular U.S. equity trading. Chesapeake rose 1.1 percent to $19.54 yesterday in New York trading.

80 Percent Gas

Even as Chesapeake has emphasized the search for oil and so-called gas liquids such as propane, gas still accounted for 80 percent of the company’s 2012 output. Gas has risen 30 percent this year, touching a 20-month high of $4.43 on April 18, as a glut from North American shale formations that slashed prices to a decade-low in 2012 began to ease.

Chesapeake has outspent cash flow for most of the past two decades as it amassed prospective gas and oil fields faster than it could afford to drill wells. Chesapeake is seeking to raise as much as $7 billion this year from asset sales to cover a cash-flow shortfall and reduce debt. The company signed agreements last year to sell $12 billion in properties, short of McClendon’s original target.

McClendon, 53, was ousted as chairman in 2012 and ultimately lost the CEO’s post, too, after investors such asCarl Icahn and Southeastern Asset Management Inc.’s O. Mason Hawkins objected to management missteps and stagnating performance. A board inquiry into McClendon’s use of personal stakes in thousands of company-owned wells to obtain more than $800 million in private loans cleared him of any intentional wrongdoing in February.

McClendon was replaced at the gas explorer he co-founded almost a quarter century ago by one of his longest-serving lieutenants, Chief Operating Officer Steven Dixon. Dixon assumed the title of acting CEO while the company searches for someone to fill the role permanently, Chesapeake said in a March 29 statement.



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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.