Chesapeake Energy Corporation Fails to Meet Earnings Forecasts

Chesapeake Energy Corporation (NYSE: CHK), the second largest producer of natural gas posted downbeat earnings results today as oil and natural gas markets struggle to report continuous improvement.

For the second quarter of the current fiscal year, the natural gas producer reported an adjusted loss of 14 cents per share, failing to meet the consensus estimate by 3 cents. Before the adjustments, the natural gas corporation lost approximately $1.8 billion or $2.48 per share during the given period. This loss is primarily due to a $1.045 billion impairment charge against Chesapeake’s oil and natural gas assets.


In the given period, the company managed to generate revenues of $1.6 billion, missing forecasts of $330 million. The natural gas producer’s revenues have been cut in half on a year-over-year basis.The reason behind this is that the average realized prices on crude oil and natural gas slumped during the quarter.

Due to the ongoing decline in the energy markets, Chesapeake has shed over 90 percent of its market value. Aside from the low oil price environment, the company’s biggest concern at the moment is its high debt load. So far this 2016, the natural gas company employed a number of measures, such as a major debt reduction through swaps.


Chesapeake CEO Doug Lawler stated, “In 2016, we have made substantial progress on many fronts, including the reduction of more than $1 billion of debt, the reduction of complexity in our portfolio through the purchase of oil and natural gas interests previously conveyed in certain volumetric production payment transactions (VPPs), the continued improvement in our cash cost structure and the optimization of our current portfolio through non-core asset sales.”

After the earnings report, the company’s stock is changing hands at $5.15 during pre-market hours, down by 2.65 percent. As of 10:32 AM GMT -4, the CHK stock is trading at $5.08, down by 3.88 percent or 0.20 points.

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