CHESAPEAKE ENERGY CORPORATION REPORTS 2023 SECOND QUARTER RESULTS
- Strong Q2 results with net income of $391 million and adjusted EBITDAX of $524 million
- Increased base dividend by 4.5%
- Completed $125 million of share repurchases during Q2
- Received upgrades to Ba1 and BB+ from Moody's and Fitch Ratings
- Efficient production improvements and focus on sustainability and LNG readiness
- None.
- Net cash provided by operating activities of
$515 million - Net income of
, or$391 million per diluted share (all per share amounts stated on a diluted basis); adjusted net income(1) of$2.73 , or$92 million per share$0.64 - Delivered total net production of 3,653 mmcfe per day and adjusted EBITDAX(1) of
$524 million - Increased base dividend approximately
4.5% ; announced total quarterly dividend of per common share to be paid in September 2023$0.57 5 - Completed approximately
of share repurchases during second quarter; returned approximately$125 million YTD through second quarter via dividends and share repurchases$515 million - Cash on hand of approximately
as of June 30, 2023$900 million - Received recent upgrades to Ba1 and BB+ from Moody's and Fitch Ratings, respectively; continued path towards Investment Grade credit status
- Entered into new heads of agreements (HOA) with Lake Charles LNG supporting previously announced Gunvor LNG HOA
- Achieved Grade "A" MiQ and Grade "A-" EO100TM Recertification for Marcellus Operations
(1) A Non-GAAP measure as defined in the supplemental financial tables available on the company's website at www.chk.com.
Nick Dell'Osso, Chesapeake's President and Chief Executive Officer, said, "Our team delivered another strong quarter, driven by outstanding operational results across our portfolio. We were purposefully built to deliver sustainable performance through commodity cycles. Our strong balance sheet and deep liquidity underpin the leading rock, returns and runway of our portfolio and have allowed us to repurchase shares at a compelling valuation and grow our base dividend. Our focus is clear — to Be LNG Ready and opportunistically capitalize on our strong financial position and leading operating performance. We remain confident in our ability to deliver affordable, reliable, lower carbon energy with peer-leading returns to shareholders."
Operational Results
Second quarter net production was approximately 3,653 mmcfe per day (
Chesapeake is currently operating nine rigs including four in the Marcellus and five in the Haynesville. As previously announced, the company released a rig from the Marcellus at the beginning of the third quarter and another from the Haynesville this week. Drilling operations in the Eagle Ford asset have concluded for the year.
The company is currently operating one frac crew in the Marcellus and one in the Haynesville having released one crew each from the Marcellus, Haynesville, and Eagle Ford in the second or beginning of the third quarter.
Chesapeake continued to build upon its peer leading operational performance, recognizing additional efficiency improvements during the second quarter. In the Marcellus, the company drilled three of the five fastest wells in its history, including the fastest well, a 10,383-foot lateral to a total depth of 17,083 feet in less than eight days. In the Haynesville, continuous pumping technology employed in 2023 has led to a greater than
The company expects to drill 30 to 40 wells and place 40 to 50 wells on production in the third quarter of 2023. The company's operating plan remains flexible and is prepared for further adjustments based on market conditions.
Year-to-date, the company has acquired 10,000 net acres through its ongoing leasing program in the Marcellus and Haynesville at an average cost of
On its continued path to Be LNG Ready, the company entered into a Heads of Agreement (HOA) with Energy Transfer LP's Lake Charles LNG project. Under the agreement, Chesapeake will supply to Lake Charles LNG volumes of natural gas sufficient to produce up to 1.0 mtpa of LNG which, post liquefaction, would be purchased by Gunvor at a price indexed to JKM for a period of 15 years.
Financial and Shareholder Return Update
During the second quarter of 2023, Chesapeake generated
Through July 31, 2023, Chesapeake repurchased approximately 2.6 million shares of its common stock for approximately
Since April, Chesapeake's IDR has been updated to 'BB+' maintaining a positive outlook and 'Ba1' with a stable outlook by Fitch Ratings and Moody's, respectively. The agencies attributed strengths of scale, conservative financial policy, and cash optionality as fundamental to the company's continued rating improvement. Chesapeake now sits one notch below investment grade at the agencies.
Sustainability Update
Chesapeake achieved recertification of its natural gas production across the entirety of its Marcellus operations, which averaged approximately 4.4 billion cubic feet (bcf) of gross natural gas per day during the second quarter of 2023. The company received a grade A under the MiQ methane emissions standard and a grade A- from Equitable Origin's EO100™ Standard for Responsible Energy Development, which focuses on environmental, social and governance (ESG) performance. The company expects to obtain recertification of its Haynesville assets in December.
The company also published its 2022 Sustainability Report in June, marking Chesapeake's 11th year reporting on its environmental, social and governance (ESG) performance. The report continues the company's commitment to transparency, enhanced disclosures and measurable progress.
Conference Call Information
Chesapeake plans to conduct a conference call to discuss recent financial and operating results at 9:00 a.m. EDT on Wednesday, August 2, 2023. The telephone number to access the conference call is 888-317-6003 or 412-317-6061 for international callers. The passcode for the call is 7847679.
Financial Statements, Non-GAAP Financial Measures and 2023 Guidance
The company's 2023 second quarter financial and operational results, along with non-GAAP measures that adjust for items that are typically excluded by securities analysts, are available on the company's website. Such non-GAAP measures should be not considered as an alternative to GAAP measures. Reconciliations of these non-GAAP measures and other disclosures are provided with the supplemental financial tables available on the company's website at www.chk.com. Management's updated guidance for 2023 can be found within the company's quarterly data supplement found on their website at www.chk.com.
Headquartered in
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements include our current expectations or forecasts of future events, including matters relating to the continuing effects of the impact of inflation and commodity price volatility resulting from
Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: the impact of inflation and commodity price volatility resulting from
We caution you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the filing date, and we undertake no obligation to update this information. We urge you to carefully review and consider the disclosures in this release and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.
INVESTOR CONTACT: | MEDIA CONTACT: |
Chris Ayres (405) 935-8870 ir@chk.com | Brooke Coe (405) 935-8878 media@chk.com |
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SOURCE Chesapeake Energy Corporation
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