Chesapeake Energy Loss Narrows; to Sell Some Assets

By Tess Stynes 

Chesapeake Energy Corp. on Thursday said its first-quarter loss narrowed as the embattled energy producer posted a smaller asset write-down than a year earlier as the result of low oil and gas prices.

Chesapeake also reached a deal to sell acreage in the Anadarko Basin Stack play to Newfield Exploration Co. for $470 million, part of Chesapeake's broader efforts to improve its balance sheet and ride out the commodities downturn.

Shares rose 12% to $6.33 in recent premarket trading. The U.S. shale driller in February said was is aiming to raise as much a $1 billion this year by selling noncore assets.

Chief Executive Doug Lawler said the deal with Newfield "accelerates value from a portion of our undeveloped acreage that currently generates very little cash flow, giving us the ability to enhance current liquidity."

"This transaction contributes substantially to achieving our previously announced target of an incremental $500 million to $1 billion of asset sales by year-end," Mr. Lawler said. "We anticipate subsequent divestitures during the second and third quarters."

Over all, Chesapeake Energy reported a first-quarter loss of $964 million, or $1.44 a share, compared with a year-earlier loss of $3.74 billion, or $5.72 a share. Excluding the asset write-down and other one-time items, the adjusted per-share loss was 10 cents. Revenue fell 39% to $1.95 billion.

Analysts polled by Thomson Reuters expected a loss of 10 cents a share on revenue of $2.55 billion.

The Oklahoma City company was co-founded in 1989 by the late Aubrey McClendon, who died in a car crash in March, a day after he was indicted on a charge of conspiring to rig bids on oil and gas leases in Oklahoma. A pioneer the shale energy boom, Mr. McClendon's extreme risk-taking had caused him personal and professional financial hardships that spurred activist investors, including Carl Icahn, to oust him as Chesapeake's chief executive in 2013.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

May 05, 2016 09:43 ET (13:43 GMT)

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