Chesapeake Energy Corp. (NYSE: CHK) is scheduled to release its first-quarter financial results after the closing bell on Tuesday, May 4, 2010. Analysts, on average, currently expect the company to report earnings of 70 cents a share on revenue of $2.37 billion. In the year ago quarter, the company reported earnings of 46 cents per share on revenue of $2 billion.
Chesapeake Energy Corporation is a producer of natural gas in the United States. It owns interests in approximately 44,100 producing natural gas and oil wells that are producing approximately 2.4 billion cubic feet equivalent (bcfe), per day, 93% of which is natural gas. The Company is focused on discovering, acquiring and developing conventional and unconventional natural gas reserves onshore in the United States. It also has operations in the Granite Wash Plays of western Oklahoma and the Texas Panhandle regions, and in the Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States.
In the preceding fourth quarter, the Oklahoma City, Oklahoma-based company reported narrower loss of $530 million or 84 cents per share, compared with a loss of $1.01 billion, or $1.74 per share, in the year-ago quarter. Total adjusted net income increased to $496 million or 77 cents per share from $444 million or 75 cents per share in the comparable quarter a year ago. Revenue declined to $2.22 billion from $2.98 billion in the year-ago quarter. Analysts, on average, expected the company to report adjusted earnings of 70 cents a share on revenue of $2.00 billion for the quarter.
The company's fourth quarter average daily production increased 13% over 2008 fourth quarter production. Chesapeake's daily production for the quarter averaged 2.618 billion cubic feet of natural gas equivalent or bcfe, an increase of 13%, over the 2.316 bcfe produced per day in the prior year fourth quarter.
In February, the company said that it estimates natural gas production to be in the range of 882 bcf - 902 bcf, oil production to be around 15,500 mbbls, and natural gas equivalent to be in the range of 975 bcfe - 995 bcfe for the year 2010. The daily natural gas equivalent midpoint is estimated at 2,700 mmcfe. The year-over-year production increase is indicated at 8%-10%.
For the year 2011, Chesapeake estimates natural gas production to be in the range of 1,025 bcf - 1,045 bcf, oil production to be around 17,500 mbbls, and natural gas equivalent in the range of 1,130 bcfe - 1,150 bcfe. The daily natural gas equivalent midpoint is estimated at 3,125 mmcfe. The year-over-year production increase is estimated to be around 15%-17%.
Chesapeake Energy Corp (CHK.N), one of the most active U.S. natural gas drillers, said on Monday its production rose 9 percent in the first quarter.
The company, based in Oklahoma City, said in an operational report that its first-quarter daily production averaged 2.586 billion cubic feet equivalent. Production was down 1 percent from the fourth quarter.
Natural gas has been touted as the next big fuel, as it burns cleaner, more efficiently, and can be cheaper than oil. Natural gas is taking on a bigger energy role in the U.S., especially for electricity generation. Last year, electric generation from natural gas increased 5.1 percent while generation from coal fell 10.8 percent, according to the Energy Information Administration. More than a fifth of the nation's electricity now comes from gas. According to EIA forecasts, U.S. natural gas consumption this year would average about 63.8 bcf per day, up 1.9percent from 2009 demand of 62.28 bcf daily. EIA expects total natural gas consumption to decline by 0.6 percent in 2011.
NYMEX Natural Gas futures is up 13 percent from a year ago.
In terms of stock performance, Chesapeake shares are down over 12% since the beginning of the year. Shares of the company closed at $24.08. on Monday.
Full Disclosure: None.
