Chesapeake Raises Output, Capex Outlook

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Chesapeake Energy on Tuesday raised its full-year forecasts for adjusted core income and production after beating Wall Street estimates for the second quarter. The company also initiated a variable return program to deliver 50% of free cash flow to shareholders on a quarterly basis, payable in the first quarter of 2022. Once the second-largest US natural gas producer, Chesapeake filed for court protection last June, saddled with more than $9 billion debt from overspending on assets and a sudden decline in oil prices (OD Jun.30'20). After emerging from bankruptcy in February, Chesapeake endured senior management shake-ups, with CEO Doug Lawler leaving the company in April (OD Apr.27'21). It also said in June that three top executives would leave the company. The company's net long-term debt stood at $1.26 billion as of Jun. 30. Chesapeake on Tuesday increased its expected 2021 adjusted Ebidax (earnings before interest, taxes, depreciation, amortization and exploration expense) by 16% to between $1.8 billion and $1.9 billion. The company also boosted its total annual production forecast to 415,000-435,000 boe/d and kept its full-year capex outlook unchanged at $670 million-$740 million. The Oklahoma City-based oil and gas producer said it achieved an average net production rate of about 433,000 boe/d in the second quarter. Chesapeake added that it is currently operating seven rigs: three in the Marcellus Shale in Pennsylvania, three in the Haynesville Shale in Louisiana and one in the South Texas Eagle Ford Shale. (Reuters)

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