- Company beats analyst profit expectations
- Net income for the quarter comes in at $486 million
- Oil production for the current year set to be 32% higher
Chesapeake Energy benefited from rising natural gas prices in the fourth quarter, helping the company to beat analysts’ profit expectations.
Reporting its highest gross margins since 2014, the Oklahoma City-based company revealed that there was a 57% hike in fourth-quarter profits. News of the figures led to a 9.7% increase in share values in Wednesday trading.
Net income for the quarter stood at $486 million. This is up from $309 million a year earlier, representing 49 cents a share up from 33 cents. The company’s adjusted earnings report was 21 cents per share based on revenue of $3.07 billion.
Analysts had expected the report to show figures of 18 cents earnings on revenue of $2.28 billion.
Chesapeake Energy CEO Doug Lawler commented: “Our 2018 accomplishments of 10% adjusted oil growth, improved realizations and lower absolute cash costs compared to 2017 resulted in the highest EBITDA generated per boe for Chesapeake since 2014, when oil averaged more than $90 per barrel and gas averaged more than $4 per thousand cubic feet.”
“Our oil focus will be fully evident in 2019, as annual net oil volumes from the PRB are expected to more than double compared to 2018 and as we begin a robust drilling program on our Brazos Valley asset,” Lawler added.
The company expects to increase its daily oil production for the current year by around 32%. This will be aided by the acquisition of Texas oil producer WildHorse for $4 billion.
Capital expenditure expectations in 2019 are expected to be flat, the company said, setting a predicted range of between $2.3 billion and $2.5 billion.