Chesapeake Expects Eagle Ford To Support Q4 Production Growth
Zacks Investment Research | Feb 07, 2018 09:24PM ET
Chesapeake Energy Corporation (NYSE:CHK) recently provided a glimpse of its fourth-quarter 2017 production update. The upstream firm also provided details on deals signed for divesting non-core assets.
Details on Production
The company projects fourth-quarter 2017 production at 593,000 barrels of oil equivalent (BoE) per day, up 15% from a year ago and 10% from the previous quarter. The quarterly output has been adjusted for the divested assets.
An uptick in crude output from the Eagle Ford acres of the firm led to the increase in oil equivalent production. Ramp up of natural gas output from the acres of Haynesville and Marcellus also drove total production.
Out of the total average daily production, the proportion of crude stands at 100,000 barrels. The daily output of natural gas and natural gas liquids were recorded at 2.6 billion cubic feet and 59,500 barrels, respectively.
Asset Divestures
Chesapeake entered three different accords during the October-to-December quarter of 2017 and the January-to-March quarter of 2018. The agreements reflect the company’s plan to divest its acres in the Mid-Continent region.
The company concluded one of the divestments in January. The other two transactions will likely conclude by the end of the April-to-June quarter of 2018. The assets to be sold comprised 3,000 producing wells that spread over 238,000 net acres. Presently, the daily net production from the resources stands at 23,000 BoE.
The total value of the transaction stands at roughly $500 million. The proceeds will likely get utilized to lower outstanding debts. For reducing debt load, Chesapeake is also expected to use the $78-million in proceeds from the sale of roughly 4.3 million FTS International stock.
The company expects fourth-quarter capital expenditure of roughly $525 million.
About the Company & Price Chart
Chesapeake is primarily involved in developing prospective oil and gas resources in the United States.
The pricing chart of the company — based in Oklahoma City — is not lucrative. Over the past year, the stock has lost 52.8%, underperforming the Zacks Investment Research
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