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Chesapeake misses analysts' profit estimates

By Bob Downing Published: February 26, 2014

From Bloomberg News today:

Chesapeake Energy Corp., the second-largest U.S. natural gas producer, missed analysts’ profit estimates by the biggest margin in almost two years as energy prices fell and costs to exit leases and cut jobs rose.

Fourth-quarter profit was $161 million, or 27 cents a share, excluding one-time expenses related to closing offices in north Texas, firing workers and terminating drilling rig contracts, the Oklahoma City-based company with Ohio operations said Wednesday.

Per-share earnings were 13 cents below the average estimate from 28 analysts in a Bloomberg survey.

Chief Executive Officer Doug Lawler has been scaling back spending on drilling and acquisitions since his appointment last year to replace fired co-founder Aubrey McClendon amid a shareholder revolt.

The company plans to raise more than $1 billion from asset sales this year to close a gap between cash flow and expenditures.

Fourth-quarter profit was "materially lower" than expectations, a team of analysts led by Matthew Portillo at Tudor Pickering Holt & Co., wrote in a note to clients Wednesday.

The per-share result was 33 percent below the average estimate, the largest miss since the first quarter of 2012, according to data compiled by Bloomberg. Chesapeake shares have increased about 41 percent in the past year.

The prices Chesapeake received for crude and gas fell by 2.9 percent and 8.2 percent, respectively, from a year earlier.

Lawler said costs associated with shutting underperforming business units and shrinking the company’s footprint in some U.S. shale formations will start to decline.

"Most of the charges related to our organizational restructuring are in the rear-view mirror," Lawler said during a conference call with analysts and investors. "We’ve dramatically improved our capital efficiency,"

The company has already sold or is in negotiations to divest about $1 billion in assets this year, according to the statement. That figure excludes the possible sale or spinoff of the oilfield services division and other undisclosed dispositions, the company said. Asset sales last year totaled $4.4 billion.

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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.