CHESAPEAKE ENERGY CORPORATION OKLAHOMA CITY, Aug. 4, 2016 /PRNewswire/ -- Chesapeake Energy Corporation (NYSE:CHK) today reported financial and operational results for the 2016 second quarter. Highlights include:
-- Total debt reduction of more than $1.0 billion year to date
-- 2016 second quarter production averaged approximately 657,100 boe per
day; company increases full-year 2016 production guidance by 3% while
maintaining capital expenditure guidance
-- Cost structure improvements lead to lower full-year 2016 production
expense guidance
-- Company increases target of 2016 total gross proceeds from asset
divestitures by year-end to more than $2.0 billion from $1.2 to $1.7
billion; selected Haynesville Shale acreage expected to be sold
Doug Lawler, Chesapeake's Chief Executive Officer, commented, "In 2016, we have made substantial progress on many fronts, including the reduction of more than $1 billion of debt, the reduction of complexity in our portfolio through the purchase of oil and natural gas interests previously conveyed in certain volumetric production payment transactions (VPPs), the continued improvement in our cash cost structure and the optimization of our current portfolio through non-core asset sales.
"Financial discipline remains our top priority, and we continue to work toward additional solutions to improve our liquidity, reduce our midstream commitments and enhance our margins. With continued improvements in our operating expenses and the disposition of non-core properties, we have refined our portfolio to provide a more competitive foundation for Chesapeake. In addition, the application of new technologies, including longer laterals and enhanced completion techniques, to our extensive undeveloped acreage position provides us with a robust portfolio of development opportunities."
Lawler continued, "As a result of our portfolio's strong performance to date in 2016, we have increased our total production guidance for the remainder of the year. As for an initial look into 2017, we believe our oil production will be relatively flat in 2017 as compared to 2016, while total production volumes are projected to be down approximately 5% compared to 2016 levels. With the breadth and depth of our large acreage position, the evolution of technologies being applied to our portfolio and the reduction in our leverage and complexity, we believe that the next few months will be a very exciting time for Chesapeake."
2016 Second Quarter Results
For the 2016 second quarter, Chesapeake's revenues declined by 54% year over year, primarily due to a decrease in the average realized commodity prices received for its production, unrealized losses from oil and natural gas derivatives and a decrease in the average realized commodity prices received for its marketing operations. Average daily production for the 2016 second quarter of approximately 657,100 barrels of oil equivalent (boe) consisted of approximately 90,500 barrels (bbls) of oil, 2.960 billion cubic feet (bcf) of natural gas and 73,200 bbls of natural gas liquids (NGL). As a result of the company's strong production through the first six months of 2016, Chesapeake has raised its full-year 2016 production guidance by 3% (using midpoints) from 605,000 to 635,000 boe per day to a new range of 625,000 to 650,000 boe per day. A summary of the company's guidance for 2016 is provided in the Outlook dated August 4, 2016, beginning on Page 18.
Chesapeake's cash expenses continue to decline due to its focus on cost discipline. Average production expenses during the 2016 second quarter were $3.05 per boe. G&A expenses (including stock-based compensation) during the 2016 second quarter were $1.02 per boe. Combined production and G&A expenses (including stock-based compensation) during the 2016 second quarter were $4.07 per boe, a decrease of 25% year over year and 2% from the 2016 first quarter.
Chesapeake reported a net loss available to common stockholders of $1.792 billion, or $2.48 per share, while the company's ebitda for the 2016 second quarter was $(1.394) billion. The primary drivers of the net loss were a noncash impairment of the carrying value of Chesapeake's oil and natural gas properties of approximately $1.045 billion, largely resulting from decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices as of June 30, 2016, as compared to March 31, 2016, and unrealized hedging losses of approximately $544 million. Adjusting for these and other items that are typically excluded by securities analysts, the 2016 second quarter adjusted net loss available to common stockholders was $145 million, or $0.14 per common share, while the company's adjusted ebitda was $252 million in the 2016 second quarter. Reconciliations of financial measures calculated in accordance with generally accepted accounting principles (GAAP) to non-GAAP measures are provided on pages 12 - 16 of this release.
Capital Spending Overview
Chesapeake's total capital investments were approximately $456 million during the 2016 second quarter, compared to approximately $957 million in the 2015 second quarter, as summarized in the table below. While the company has reiterated its total capital investments program for 2016 of approximately $1.3 to $1.8 billion, it now expects to be at the higher end of its current guidance range due to additional drilling and completion activity as a result of efficiency gains and an acquisition of additional working interests in the Haynesville Shale. A summary of the company's guidance for 2016 is provided in the Outlook dated August 4, 2016, beginning on Page 18.
2016 2016 2015
Activity Comparison Q2 Q1 Q2
------------------- --- --- ---
Average operated rig count 9 8 26
Gross wells completed 131 57 121
Gross wells spud 49 41 109
Gross wells connected 141 80 173
===================== === === ===
Type of Cost ($ in millions)
Drilling and completion costs $337 $281 $787
Exploration costs and additions to other
PP&E 56 16 56
---------------------------------------- --- --- ---
Subtotal capital expenditures $393 $297 $843
Capitalized interest 63 68 114
Total capital expenditures $456 $365 $957
========================== ==== ==== ====
Balance Sheet and Liquidity
As of June 30, 2016, Chesapeake's debt principal balance was approximately $8.7 billion, including approximately $100 million of borrowings outstanding on the company's $4.0 billion revolving credit facility, compared to $9.7 billion as of December 31, 2015, and $11.7 billion as of June 30, 2015. Since January 1, 2016, the company has retired at maturity, repurchased or exchanged for equity approximately $1.0 billion of debt, $518 million of which was due or putable to the company in 2017.
In April 2016, Chesapeake amended its $4.0 billion revolving credit facility maturing in 2019 to reaffirm its borrowing base, restructure financial covenants and increase its ability to issue secured debt. Using June 30, 2016 crude oil and natural gas strip pricing, Chesapeake estimates that the PV-10 of its proved oil and gas reserves was approximately $11.1 billion, compared to approximately $3.1 billion when using the average of commodity prices on the first day of the month over the trailing 12-month period (see Page 17 of this release for additional information). In addition to $100 million of borrowings under the company's revolving credit facility, letters of credit issued under the credit facility were approximately $813 million as of June 30, 2016, which included a $461 million supersedeas bond supporting the company's appeal of the judgment issued in 2015 with respect to the company's 2019 Notes litigation.
Asset Acquisition and Divestitures Update
Through the 2016 second quarter, the company's asset divestiture activities have totaled $964 million in net proceeds received to date, after post-closing adjustments. In addition, consideration of more than $100 million was withheld subject to certain title, environmental and other standard contingencies, the majority of which Chesapeake expects to collect in the third quarter. In conjunction with certain of these sales, Chesapeake repurchased oil and natural gas interests previously sold to third parties in connection with four of its VPP transactions for approximately $259 million. A majority of the acquired interests were part of the asset divestitures discussed above and the company no longer has any further commitments related to these VPPs. With the closing of these VPP acquisitions in the 2016 second quarter, the company has only two VPPs remaining.
The company continues to focus on select asset divestitures and is currently planning to sell additional properties by year-end 2016, including a portion of its Haynesville Shale properties. As a result, Chesapeake has raised its 2016 guidance for total gross asset divestitures either closed or under signed sales agreements to now be more than $2.0 billion, compared to its previous range of $1.2 to $1.7 billion.
In July 2016, Chesapeake purchased certain operated working interests to enhance its Haynesville Shale acreage position for approximately $87 million, increasing its average operated working interest in the area to approximately 83% and adding to its net acreage position by approximately 70,000 net acres. The company closed this transaction in the 2016 third quarter.
Operations Update
Chesapeake is currently utilizing 10 drilling rigs across its operating areas, three of which are located in the Eagle Ford Shale, three in the Haynesville Shale, three in the Mid-Continent area and one rig in the Utica Shale. Due to greater capital efficiencies and lower oilfield service costs, Chesapeake is currently planning to operate these 10 rigs throughout the remainder of the year and, as a result, plans to drill more than 100 additional wells and place approximately 75 additional wells on production in 2016. While the company is maintaining its 2016 total capital expenditures guidance to be approximately $1.3 to $1.8 billion, it now expects to be at the higher end of its current guidance range.
In July 2016, Chesapeake placed the CA 12&13-15-15 1H horizontal well on production, targeting the Haynesville Shale in Caddo Parish, Louisiana. This well's results provide further confirmation that the company's current completion optimization techniques, along with extended laterals, are having a significant impact on higher sustained flow rates and the increased potential for higher rates of return in all areas of the Haynesville. With reducing cluster spacing and increased proppant loading, this 10,000-foot lateral well reached a maximum production rate of approximately 38.0 million cubic feet of gas (mmcf) per day with a flowing tubing pressure of 7,400 psi. The company's current estimate of the ultimate recovery from this well is approximately 22 to 24 bcf with an estimated completed well cost of approximately $9.8 million. The PCK 1H, a 7,500-foot lateral well located in DeSoto Parish, reached a maximum production rate of 31.0 mmcf per day with a flowing pressure of 7,600 psi using similar completion techniques for an estimated well cost of $8.4 million. Chesapeake believes that leading-edge completion techniques, along with access to Gulf Coast pricing, could increase field-wide productivity by opening up new areas in the field that were previously economically challenged.
Key Financial and Operational Results
The table below summarizes Chesapeake's key financial and operational results during the 2016 second quarter as compared to results in prior periods.
Three Months Ended
------------------
06/30/16 03/31/16 06/30/15
-------- -------- --------
Oil equivalent production (in
mmboe) 60 61 64
Oil production (in mmbbls) 8 9 11
Average realized oil price
($/bbl)(a) 44.31 37.74 71.39
Natural gas production (in bcf) 269 276 275
Average realized natural gas price
($/mcf)(a) 1.97 2.29 2.35
NGL production (in mmbbls) 7 6 7
Average realized NGL price
($/bbl)(a) 12.88 11.44 13.02
Production expenses ($/boe) (3.05) (3.36) (4.32)
Gathering, processing and
transportation expenses ($/boe) (8.04) (7.88) (7.64)
Production taxes ($/boe) (0.32) (0.30) (0.52)
General and administrative
expenses ($/boe)(b) (0.86) (0.66) (0.89)
Stock-based compensation ($/boe) (0.16) (0.13) (0.19)
DD&A of oil and natural gas
properties ($/boe) (4.43) (4.43) (9.39)
DD&A of other assets ($/boe) (0.48) (0.48) (0.52)
Interest expenses ($/boe)(a) (1.00) (0.98) (1.12)
Marketing, gathering and
compression net margin ($ in
millions)(c) (25) 18 209
Operating cash flow ($ in
millions)(d) 176 263 572
Operating cash flow ($/boe) 2.94 4.29 8.94
Adjusted ebitda ($ in millions)(e) 252 282 600
Adjusted ebitda ($/boe) 4.21 4.61 9.37
Net loss available to common
stockholders ($ in millions) (1,792) (964) (4,151)
Loss per share - diluted ($) (2.48) (1.44) (6.27)
Adjusted net loss available to
common stockholders ($ in
millions)(f) (145) (120) (126)
Adjusted loss per share ($) (g) (0.14) (0.12) (0.13)
(a) Includes the effects of realized
gains (losses) from hedging, but
excludes the effects of
unrealized gains (losses) from
hedging.
(b) Excludes expenses associated with
stock-based compensation and
restructuring and other
termination costs.
(c) Includes revenue, operating
expenses and ($37 million), $20
million and $220 million of
unrealized gains (losses) on
supply contract derivatives for
the three months ended June 30,
2016, March 31, 2016 and June 30,
2015, respectively. Excludes
depreciation and amortization of
other assets.
(d) Defined as cash flow provided by
operating activities before
changes in assets and
liabilities.
(e) Defined as net income before
interest expense, income taxes
and depreciation, depletion and
amortization expense, as adjusted
to remove the effects of certain
items detailed on page 16.
(f) Defined as net income available to
common stockholders, as adjusted
to remove the effects of certain
items detailed on page 12.
(g) We have revised our presentation
of adjusted loss per share to
exclude shares considered
antidilutive when calculating
earnings per share in accordance
with GAAP.
2016 Second Quarter Financial and Operational Results Conference Call Information
A conference call to discuss this release has been scheduled on Thursday, August 4, 2016, at 9:00 am EDT. The telephone number to access the conference call is 866-454-4209 or international toll 913-312-9308. The passcode for the call is 4546210. The number to access the conference call replay is 719-457-0820 or toll-free 888-203-1112 and the passcode for the replay is 4546210. The conference call will also be webcast live at www.chk.com in the "Investors" section of the company's website. The webcast of the conference will be available on the website for one year.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. The company also owns oil and natural gas marketing and natural gas gathering and compression businesses. Further information is available at www.chk.com where Chesapeake routinely posts announcements, updates, events, investor information, presentations and news releases.
This news release and the accompanying Outlook include "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. Forward-looking statements are statements other than statements of historical fact. They include statements that give our current expectations or forecasts of future events, production and well connection forecasts, estimates of operating costs, anticipated capital and operational efficiencies, planned development drilling and expected drilling cost reductions, general and administrative expenses, capital expenditures, the timing of anticipated noncore asset sales and proceeds to be received therefrom, projected cash flow and liquidity, our ability to enhance our cash flow and financial flexibility, plans and objectives for future operations (including our ability to optimize base production and execute gas gathering agreements), the ability of our employees, portfolio strength and operational leadership to create long-term value, and the assumptions on which such statements are based. Although we believe the expectations and forecasts reflected in the forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties.
Factors that could cause actual results to differ materially from expected results include those described under "Risk Factors" in Item 1A of our annual report on Form 10-K and any updates to those factors set forth in Chesapeake's subsequent quarterly reports on Form 10-Q or current reports on Form 8-K (available at http://www.chk.com/investors/sec-filings). These risk factors include the volatility of oil, natural gas and NGL prices; the limitations our level of indebtedness may have on our financial flexibility; our inability to access the capital markets on favorable terms or at all; the availability of cash flows from operations and other funds to finance reserve replacement costs or satisfy our debt obligations; a further downgrade in our credit rating requiring us to post more collateral under certain commercial arrangements; write-downs of our oil and natural gas asset carrying values due low commodity prices; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities of oil, natural gas and NGL reserves and projecting future rates of production and the amount and timing of development expenditures; our ability to generate profits or achieve targeted results in drilling and well operations; leasehold terms expiring before production can be established; commodity derivative activities resulting in lower prices realized on oil, natural gas and NGL sales; the need to secure derivative liabilities and the inability of counterparties to satisfy their obligations; adverse developments or losses from pending or future litigation and regulatory proceedings, including royalty claims; charges incurred in response to market conditions and in connection with our ongoing actions to reduce financial leverage and complexity; drilling and operating risks and resulting liabilities; effects of environmental protection laws and regulation on our business; legislative and regulatory initiatives further regulating hydraulic fracturing; our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used; impacts of potential legislative and regulatory actions addressing climate change; federal and state tax proposals affecting our industry; potential OTC derivatives regulation limiting our ability to hedge against commodity price fluctuations; competition in the oil and gas exploration and production industry; a deterioration in general economic, business or industry conditions; negative public perceptions of our industry; limited control over properties we do not operate; pipeline and gathering system capacity constraints and transportation interruptions; terrorist activities and cyber-attacks adversely impacting our operations; potential challenges of our spin-off of Seventy Seven Energy Inc. (SSE) in connection with SSE's recently completed bankruptcy under Chapter 11 of the U.S. Bankruptcy Code; an interruption in operations at our headquarters due to a catastrophic event; the continuation of suspended dividend payments on our common stock and preferred stock; certain anti-takeover provisions that affect shareholder rights; and our inability to increase or maintain our liquidity through debt repurchases, capital exchanges, asset sales, joint ventures, farmouts or other means.
In addition, disclosures concerning the estimated contribution of derivative contracts to our future results of operations are based upon market information as of a specific date. These market prices are subject to significant volatility. Our production forecasts are also dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Expected asset sales may not be completed in the time frame anticipated or at all. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release, and we undertake no obligation to update any of the information provided in this release or the accompanying Outlook, except as required by applicable law.
INVESTOR CONTACT: MEDIA CONTACT:
Brad Sylvester, CFA Gordon Pennoyer
(405) 935-8870 (405) 935-8878
ir@chk.com media@chk.com
CHESAPEAKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
(unaudited)
Three Months Ended
June 30,
--------
2016 2015
---- ----
REVENUES:
Oil, natural gas and
NGL $440 $1,216
Marketing, gathering
and compression 1,182 2,305
Total Revenues 1,622 3,521
----- -----
OPERATING EXPENSES:
Oil, natural gas and
NGL production 182 276
Oil, natural gas and
NGL gathering,
processing and
transportation 481 488
Production taxes 19 34
Marketing, gathering
and compression 1,207 2,096
General and
administrative 61 69
Restructuring and other
termination costs 3 (4)
Provision for legal
contingencies 82 334
Oil, natural gas and
NGL depreciation,
depletion and
amortization 265 601
Depreciation and
amortization of other
assets 29 34
Impairment of oil and
natural gas properties 1,045 5,015
Impairments of fixed
assets and other 6 84
Net (gains) losses on
sales of fixed assets (1) 1
--- ---
Total Operating
Expenses 3,379 9,028
----- -----
LOSS FROM OPERATIONS (1,757) (5,507)
------ ------
OTHER INCOME (EXPENSE):
Interest expense (62) (71)
Losses on investments (2) (17)
Gains on purchases or
exchanges of debt 68 -
Other income (expense) 3 (1)
--- ---
Total Other Income
(Expense) 7 (89)
--- ---
LOSS BEFORE INCOME
TAXES (1,750) (5,596)
------ ------
INCOME TAX BENEFIT:
Current income taxes - (6)
Deferred income taxes - (1,500)
--- ------
Total Income Tax
Benefit - (1,506)
--- ------
NET LOSS (1,750) (4,090)
Net income attributable
to noncontrolling
interests - (18)
--- ---
NET LOSS ATTRIBUTABLE
TO CHESAPEAKE (1,750) (4,108)
------ ------
Preferred stock
dividends (42) (43)
NET LOSS AVAILABLE TO
COMMON STOCKHOLDERS $(1,792) $(4,151)
======= =======
LOSS PER COMMON SHARE:
Basic $(2.48) $(6.27)
====== ======
Diluted $(2.48) $(6.27)
====== ======
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING (in
millions):
Basic 724 662
=== ===
Diluted 724 662
=== ===
CHESAPEAKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
(unaudited)
Six Months Ended
June 30,
--------
2016 2015
---- ----
REVENUES:
Oil, natural gas and
NGL $1,433 $2,759
Marketing, gathering
and compression 2,142 3,980
Total Revenues 3,575 6,739
----- -----
OPERATING EXPENSES:
Oil, natural gas and
NGL production 388 575
Oil, natural gas and
NGL gathering,
processing and
transportation 963 946
Production taxes 37 62
Marketing, gathering
and compression 2,149 3,796
General and
administrative 109 125
Restructuring and
other termination
costs 3 (14)
Provision for legal
contingencies 104 359
Oil, natural gas and
NGL depreciation,
depletion and
amortization 536 1,285
Depreciation and
amortization of other
assets 58 69
Impairment of oil and
natural gas
properties 1,898 9,991
Impairments of fixed
assets and other 44 88
Net (gains) losses on
sales of fixed assets (5) 4
--- ---
Total Operating
Expenses 6,284 17,286
----- ------
LOSS FROM OPERATIONS (2,709) (10,547)
------ -------
OTHER INCOME (EXPENSE):
Interest expense (124) (122)
Losses on investments (2) (24)
Loss on sale of
investment (10) -
Gains on purchases or
exchanges of debt 168 -
Other income 6 5
--- ---
Total Other Income
(Expense) 38 (141)
--- ----
LOSS BEFORE INCOME
TAXES (2,671) (10,688)
------ -------
INCOME TAX BENEFIT:
Current income taxes - (6)
Deferred income taxes - (2,872)
--- ------
Total Income Tax
Benefit - (2,878)
--- ------
NET LOSS (2,671) (7,810)
Net income
attributable to
noncontrolling
interests - (37)
--- ---
NET LOSS ATTRIBUTABLE
TO CHESAPEAKE (2,671) (7,847)
------ ------
Preferred stock
dividends (85) (86)
NET LOSS AVAILABLE TO
COMMON STOCKHOLDERS $(2,756) $(7,933)
======= =======
LOSS PER COMMON SHARE:
Basic $(3.97) $(11.99)
====== =======
Diluted $(3.97) $(11.99)
====== =======
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING (in
millions):
Basic 695 662
=== ===
Diluted 695 662
=== ===
CHESAPEAKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
(unaudited)
June 30, December 31,
2015
2016
----
Cash and cash
equivalents $4 $825
Other current assets 1,200 1,655
Total Current Assets 1,204 2,480
----- -----
Property and
equipment, (net) 11,685 14,298
Other assets 598 536
--- ---
Total Assets $13,487 $17,314
======= =======
Current liabilities $3,777 $3,685
Long-term debt, net 8,621 10,311
Other long-term
liabilities 860 921
Total Liabilities 13,258 14,917
------ ------
Preferred stock 3,036 3,062
Noncontrolling
interests 261 259
Common stock and other
stockholders' equity (3,068) (924)
------ ----
Total Equity 229 2,397
--- -----
Total Liabilities and
Equity $13,487 $17,314
======= =======
Common shares
outstanding (in
millions) 775 663
=== ===
Principal amount of
debt outstanding $8,679 $9,706
====== ======
CHESAPEAKE ENERGY CORPORATION
SUPPLEMENTAL DATA - OIL, NATURAL GAS AND NGL PRODUCTION, SALES AND INTEREST EXPENSE
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
Net Production:
Oil (mmbbl) 8 11 17 22
Natural gas (bcf) 269 275 546 539
NGL (mmbbl) 7 7 13 14
Oil equivalent
(mmboe) 60 64 121 126
Oil, natural gas and NGL Sales ($ in millions):
Oil sales $355 $594 $610 $1,080
Oil derivatives -
realized gains
(losses)(a) 11 182 84 417
Oil derivatives -
unrealized gains
(losses)(a) (168) (234) (240) (344)
Total Oil Sales 198 542 454 1,153
--- --- --- -----
Natural gas sales 440 577 923 1,347
Natural gas
derivatives -
realized gains
(losses)(a) 92 71 242 271
Natural gas
derivatives -
unrealized gains
(losses)(a) (365) (67) (335) (231)
---- --- ---- ----
Total Natural Gas
Sales 167 581 830 1,387
--- --- --- -----
NGL sales 89 93 163 219
NGL derivatives -
realized gains
(losses)(a) (3) - (3) -
NGL derivatives -
unrealized gains
(losses)(a) (11) - (11) -
Total NGL Sales 75 93 149 219
--- --- --- ---
Total Oil, Natural
Gas and NGL Sales $440 $1,216 $1,433 $2,759
==== ====== ====== ======
Average Sales Price -
excluding gains (losses) on
derivatives:
Oil ($ per bbl) $43.00 $54.69 $35.98 $49.48
Natural gas ($ per
mcf) $1.63 $2.09 $1.69 $2.50
NGL ($ per bbl) $13.37 $13.02 $12.43 $15.64
Oil equivalent ($
per boe) $14.76 $19.77 $14.01 $21.04
Average Sales Price -
including realized gains (losses) on
derivatives:
Oil ($ per bbl) $44.31 $71.39 $40.93 $68.55
Natural gas ($ per
mcf) $1.97 $2.35 $2.14 $3.00
NGL ($ per bbl) $12.88 $13.02 $12.17 $15.64
Oil equivalent ($
per boe) $16.43 $23.72 $16.68 $26.51
Interest Expense ($ in millions):
Interest(b) $63 $72 $125 $134
Interest rate
derivatives -
realized (gains)
losses(c) (3) (1) (6) (2)
Interest rate
derivatives -
unrealized (gains)
losses(c) 2 - 5 (10)
Total Interest
Expense $62 $71 $124 $122
=== === ==== ====
(a) Realized gains and losses include
the following items: (i)
settlements of nondesignated
derivatives related to current
period production revenues, (ii)
prior period settlements for option
premiums and for early-terminated
derivatives originally scheduled to
settle against current period
production revenues, and (iii)
gains and losses related to de-
designated cash flow hedges
originally designated to settle
against current period production
revenues. Unrealized gains and
losses include the change in fair
value of open derivatives scheduled
to settle against future period
production revenues offset by
amounts reclassified as realized
gains and losses during the period.
Although we no longer designate
our derivatives as cash flow hedges
for accounting purposes, we believe
these definitions are useful to
management and investors in
determining the effectiveness of
our price risk management program.
(b) Net of amounts capitalized.
(c) Realized (gains) losses include
settlements related to the current
period interest accrual and the
effect of (gains) losses on early
termination trades. Unrealized
(gains) losses include changes in
the fair value of open interest
rate derivatives offset by amounts
reclassified to realized (gains)
losses during the period.
CHESAPEAKE ENERGY CORPORATION
CONDENSED CONSOLIDATED CASH FLOW DATA
($ in millions)
(unaudited)
THREE MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
Beginning cash $16 $2,907
--- ------
Net cash provided by
operating activities 95 314
---
Cash flows from investing activities:
Drilling and completion
costs(a) (344) (862)
Acquisitions of proved and
unproved properties(b) (359) (138)
Divestitures of proved and
unproved properties 833 (7)
Additions to other property
and equipment(c) (15) (35)
Proceeds from sales of other
property and equipment 61 5
Other (2) (3)
--- ---
Net cash provided by (used
in) investing activities 174 (1,040)
--- ------
Net cash used in financing
activities (281) (130)
---- ----
Change in cash and cash
equivalents (12) (856)
--- ----
Ending cash $4 $2,051
=== ======
(a) Includes capitalized interest of
$1 million and $7 million for
the three months ended June 30,
2016 and 2015, respectively.
(b) Includes capitalized interest of
$60 million and $104 million
for the three months ended June
30, 2016 and 2015,
respectively.
(c) Includes capitalized interest of
a nominal amount and $1 million
for the three months ended June
30, 2016 and 2015,
respectively.
CHESAPEAKE ENERGY CORPORATION
CONDENSED CONSOLIDATED CASH FLOW DATA
($ in millions)
(unaudited)
SIX MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
Beginning cash $825 $4,108
---- ------
Net cash provided by (used
in) operating activities (326) 737
----
Cash flows from investing activities:
Drilling and completion
costs(a) (609) (2,168)
Acquisitions of proved and
unproved properties(b) (426) (266)
Proceeds from divestitures
of proved and unproved
properties 964 14
Additions to other property
and equipment(c) (25) (93)
Proceeds from sales of other
property and equipment 70 7
Cash paid for title defects (69) -
Additions to investments - (1)
Other (4) (5)
--- ---
Net cash used in investing
activities (99) (2,512)
--- ------
Net cash used in financing
activities (396) (282)
---- ----
Change in cash and cash
equivalents (821) (2,057)
---- ------
Ending cash $4 $2,051
=== ======
(a) Includes capitalized interest of
$3 million and $18 million for
the six months ended June 30,
2016 and 2015, respectively.
(b) Includes capitalized interest of
$124 million and $212 million
for the six months ended June
30, 2016 and 2015,
respectively.
(c) Includes capitalized interest of
$1 million and $2 million for
the six months ended June 30,
2016 and 2015, respectively.
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
(in millions, except per share data)
(unaudited)
THREE MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
Net loss available to
common stockholders $(1,792) $(4,151)
Weighted average
common and common
equivalent shares
outstanding (a) 724 662
Loss per common share
(diluted) $(2.48) $(6.27)
Adjustments:
Unrealized losses on
commodity and
interest rate
derivatives $546 $301
Unrealized (gains)
losses on supply
contract derivatives 37 (220)
Restructuring and
other termination
costs 3 (4)
Provision for legal
contingencies 82 334
Impairment of oil and
natural gas
properties 1,045 5,015
Impairments of fixed
assets and other 6 84
Net (gains) losses on
sales of fixed
assets (1) 1
Gains on purchases or
exchanges of debt (68) -
Other (3) (3)
Tax effect of above
items(b) - (1,483)
Adjusted net loss
available to common
stockholders(c) $(145) $(126)
----- -----
Preferred stock
dividends 42 43
--- ---
Total adjusted net
loss attributable to
Chesapeake $(103) $(83)
===== ====
Adjusted loss per
share(c) (d) $(0.14) $(0.13)
(a) Weighted average
common and common
equivalent shares
outstanding do
not include
shares that were
considered
antidilutive for
calculating
earnings per
share in
accordance with
GAAP.
(b) Our effective tax
rate in the three
months ended June
30, 2016 was 0%;
thus, there is no
tax effect on the
reconciling
adjustments.
(c) Adjusted net
income and
adjusted earnings
per common share
are not measures
of financial
performance under
accounting
principles
generally
accepted in the
United States
(GAAP), and
should not be
considered as an
alternative to
net income
available to
common
stockholders or
earnings per
share. Adjusted
net income
available to
common
stockholders and
adjusted earnings
per share exclude
certain items
that management
believes affect
the comparability
of operating
results. The
company believes
these adjusted
financial
measures are a
useful adjunct to
earnings
calculated in
accordance with
GAAP because:
(i) Management uses adjusted net
income available to common
stockholders to evaluate the
company's operational trends
and performance relative to
other oil and natural gas
producing companies.
(ii) Adjusted net income available to
common stockholders is more
comparable to earnings
estimates provided by
securities analysts.
(iii) Items excluded generally are
one-time items or items whose
timing or amount cannot be
reasonably estimated.
Accordingly, any guidance
provided by the company
generally excludes information
regarding these types of items.
(d) We have revised
our presentation
of adjusted loss
per share to
exclude shares
considered
antidilutive when
calculating
earnings per
share in
accordance with
GAAP.
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
(in millions, except per share data)
(unaudited)
SIX MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
Net loss available to
common stockholders $(2,756) $(7,933)
Weighted average
common and common
equivalent shares
outstanding (a) 695 662
Loss per common share
(diluted) $(3.97) $(11.99)
Adjustments:
Unrealized losses on
commodity and
interest rate
derivatives $591 $565
Unrealized (gains)
losses on supply
contract derivatives 17 (220)
Restructuring and
other termination
costs 3 (14)
Provision for legal
contingencies 104 359
Impairment of oil and
natural gas
properties 1,898 9,991
Impairments of fixed
assets and other 44 88
Net (gains) losses on
sales of fixed
assets (5) 4
Loss on sale of
investment 10 -
Gains on purchases or
exchanges of debt (168) -
Tax rate adjustment - (17)
Other (2) (7)
Tax effect of above
items(b) - (2,900)
Adjusted net loss
available to common
stockholders(c) $(264) $(84)
----- ----
Preferred stock
dividends 85 86
--- ---
Total adjusted net
income (loss)
attributable to
Chesapeake $(179) $2
===== ===
Adjusted earnings
(loss) per common
share(c) (d) $(0.26) $0.00
(a) Weighted average
common and common
equivalent shares
outstanding do
not include
shares that were
considered
antidilutive for
calculating
earnings per
share in
accordance with
GAAP.
(b) Our effective tax
rate in the six
months ended June
30, 2016 was 0%;
thus, there is no
tax effect on the
reconciling
adjustments.
(c) Adjusted net
income and
adjusted earnings
per share are not
measures of
financial
performance under
accounting
principles
generally
accepted in the
United States
(GAAP), and
should not be
considered as an
alternative to
net income
available to
common
stockholders or
earnings per
share. Adjusted
net income
available to
common
stockholders and
adjusted earnings
per share exclude
certain items
that management
believes affect
the comparability
of operating
results. The
company believes
these adjusted
financial
measures are a
useful adjunct to
earnings
calculated in
accordance with
GAAP because:
(i) Management uses adjusted net
income available to common
stockholders to evaluate the
company's operational trends
and performance relative to
other oil and natural gas
producing companies.
(ii) Adjusted net income available to
common stockholders is more
comparable to earnings
estimates provided by
securities analysts.
(iii) Items excluded generally are
one-time items or items whose
timing or amount cannot be
reasonably estimated.
Accordingly, any guidance
provided by the company
generally excludes information
regarding these types of items.
(d) We have revised
our presentation
of adjusted loss
per share to
exclude shares
considered
antidilutive when
calculating
earnings per
share in
accordance with
GAAP.
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF OPERATING CASH FLOW AND EBITDA
($ in millions)
(unaudited)
THREE MONTHS ENDED: June 30, June 30,
2016 2015
------------------- --------- ---------
CASH PROVIDED BY
OPERATING ACTIVITIES $95 $314
Changes in assets and
liabilities 81 258
--- ---
OPERATING CASH
FLOW(a) $176 $572
==== ====
THREE MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
NET LOSS $(1,750) $(4,090)
Interest expense 62 71
Income tax benefit - (1,506)
Depreciation and
amortization of
other assets 29 34
Oil, natural gas and
NGL depreciation,
depletion and
amortization 265 601
--- ---
EBITDA(b) $(1,394) $(4,890)
======= =======
THREE MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
CASH PROVIDED BY
OPERATING ACTIVITIES $95 $314
Changes in assets and
liabilities 81 258
Interest expense, net
of unrealized gains
(losses) on
derivatives 59 71
Losses on commodity
derivatives, net (444) (48)
Gains (losses) on
supply contract
derivatives, net (37) 220
Cash receipts on
commodity derivative
settlements, net (119) (223)
Stock-based
compensation (13) (20)
Restructuring and
other termination
costs (3) 4
Provision for legal
contingencies (82) (334)
Impairment of oil and
natural gas
properties (1,045) (5,015)
Impairments of fixed
assets and other (1) (79)
Net gains (losses) on
sales of fixed
assets 1 (1)
Investment activity (2) (17)
Gains on purchases or
exchanges of debt 68 -
Other items 48 (20)
--- ---
EBITDA(b) $(1,394) $(4,890)
======= =======
(a) Operating cash flow represents net cash
provided by operating activities before
changes in assets and liabilities.
Operating cash flow is presented because
management believes it is a useful
adjunct to net cash provided by operating
activities under GAAP. Operating cash
flow is widely accepted as a financial
indicator of an oil and natural gas
company's ability to generate cash that
is used to internally fund exploration
and development activities and to service
debt. This measure is widely used by
investors and rating agencies in the
valuation, comparison, rating and
investment recommendations of companies
within the oil and natural gas
exploration and production industry.
Operating cash flow is not a measure of
financial performance under GAAP and
should not be considered as an
alternative to cash flows from operating,
investing or financing activities as an
indicator of cash flows, or as a measure
of liquidity.
(b) Ebitda represents net income before
interest expense, income taxes, and
depreciation, depletion and amortization
expense. Ebitda is presented as a
supplemental financial measurement in the
evaluation of our business. We believe
that it provides additional information
regarding our ability to meet our future
debt service, capital expenditures and
working capital requirements. This
measure is widely used by investors and
rating agencies in the valuation,
comparison, rating and investment
recommendations of companies. Ebitda is
also a financial measurement that, with
certain negotiated adjustments, is
reported to our lenders pursuant to our
bank credit agreements and is used in the
financial covenants in our bank credit
agreements. Ebitda is not a measure of
financial performance under GAAP.
Accordingly, it should not be considered
as a substitute for net income, income
from operations or cash flow provided by
operating activities prepared in
accordance with GAAP.
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF OPERATING CASH FLOW AND EBITDA
($ in millions)
(unaudited)
SIX MONTHS ENDED: June 30, June 30,
2016 2015
----------------- --------- ---------
CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES $(326) $737
Changes in assets and
liabilities 765 719
--- ---
OPERATING CASH
FLOW(a) $439 $1,456
==== ======
SIX MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
NET LOSS $(2,671) $(7,810)
Interest expense 124 122
Income tax benefit - (2,878)
Depreciation and
amortization of
other assets 58 69
Oil, natural gas and
NGL depreciation,
depletion and
amortization 536 1,285
--- -----
EBITDA(b) $(1,953) $(9,212)
======= =======
SIX MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES $(326) $737
Changes in assets and
liabilities 765 719
Interest expense, net
of unrealized gains
(losses) on
derivatives 119 132
Gains (losses) on
commodity
derivatives, net (263) 113
Gains (losses) on
supply contract
derivatives, net (17) 220
Cash receipts on
commodity derivative
settlements, net (386) (636)
Stock-based
compensation (25) (43)
Restructuring and
other termination
costs (3) 14
Provision for legal
contingencies (104) (359)
Impairment of oil and
natural gas
properties (1,898) (9,991)
Impairments of fixed
assets and other (34) (81)
Net gains (losses) on
sales of fixed
assets 5 (4)
Investment activity (12) (24)
Gains on purchases or
exchanges of debt 168 -
Other items 58 (9)
--- ---
EBITDA(b) $(1,953) $(9,212)
======= =======
(a) Operating cash flow represents net cash
provided by operating activities before
changes in assets and liabilities.
Operating cash flow is presented because
management believes it is a useful
adjunct to net cash provided by operating
activities under GAAP. Operating cash
flow is widely accepted as a financial
indicator of an oil and natural gas
company's ability to generate cash that
is used to internally fund exploration
and development activities and to service
debt. This measure is widely used by
investors and rating agencies in the
valuation, comparison, rating and
investment recommendations of companies
within the oil and natural gas
exploration and production industry.
Operating cash flow is not a measure of
financial performance under GAAP and
should not be considered as an
alternative to cash flows from operating,
investing or financing activities as an
indicator of cash flows, or as a measure
of liquidity.
(b) Ebitda represents net income before
interest expense, income taxes, and
depreciation, depletion and amortization
expense. Ebitda is presented as a
supplemental financial measurement in the
evaluation of our business. We believe
that it provides additional information
regarding our ability to meet our future
debt service, capital expenditures and
working capital requirements. This
measure is widely used by investors and
rating agencies in the valuation,
comparison, rating and investment
recommendations of companies. Ebitda is
also a financial measurement that, with
certain negotiated adjustments, is
reported to our lenders pursuant to our
bank credit agreements and is used in the
financial covenants in our bank credit
agreements. Ebitda is not a measure of
financial performance under GAAP.
Accordingly, it should not be considered
as a substitute for net income, income
from operations or cash flow provided by
operating activities prepared in
accordance with GAAP.
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF ADJUSTED EBITDA
($ in millions)
(unaudited)
THREE MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
EBITDA $(1,394) $(4,890)
Adjustments:
Unrealized losses on
commodity derivatives 544 301
Unrealized (gains)
losses on supply
contract derivatives 37 (220)
Restructuring and other
termination costs 3 (4)
Provision for legal
contingencies 82 334
Impairment of oil and
natural gas properties 1,045 5,015
Impairments of fixed
assets and other 6 84
Net (gains) losses on
sales of fixed assets (1) 1
Gains on purchases or
exchanges of debt (68) -
Net income attributable
to noncontrolling
interests - (18)
Other (2) (3)
--- ---
Adjusted EBITDA(a) $252 $600
==== ====
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF ADJUSTED EBITDA
($ in millions)
(unaudited)
SIX MONTHS ENDED: June 30, June 30,
2016 2015
--- ---- ----
EBITDA $(1,953) $(9,212)
Adjustments:
Unrealized losses on
commodity derivatives 586 575
Unrealized (gains)
losses on supply
contract derivatives 17 (220)
Restructuring and other
termination costs 3 (14)
Provision for legal
contingencies 104 359
Impairment of oil and
natural gas properties 1,898 9,991
Impairments of fixed
assets and other 44 88
Net (gains) losses on
sales of fixed assets (5) 4
Loss on sale of
investment 10 -
Gains on purchases or
exchanges of debt (168) -
Net income attributable
to noncontrolling
interests - (37)
Other (2) (6)
--- ---
Adjusted EBITDA(a) $534 $1,528
==== ======
(a) Adjusted ebitda
excludes certain
items that
management
believes affect
the comparability
of operating
results. The
company believes
these non-GAAP
financial
measures are a
useful adjunct to
ebitda because:
(i) Management uses adjusted ebitda
to evaluate the company's
operational trends and
performance relative to other
oil and natural gas producing
companies.
(ii) Adjusted ebitda is more
comparable to estimates
provided by securities
analysts.
(iii) Items excluded generally are
one-time items or items whose
timing or amount cannot be
reasonably estimated.
Accordingly, any guidance
provided by the company
generally excludes information
regarding these types of items.
Accordingly,
adjusted EBITDA
should not be
considered as a
substitute for
net income,
income from
operations or
cash flow
provided by
operating
activities
prepared in
accordance with
GAAP.
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CHESAPEAKE ENERGY CORPORATION
MANAGEMENT'S OUTLOOK AS OF AUGUST 4, 2016
Chesapeake periodically provides guidance on certain factors that
affect the company's future financial performance. Changes from
the company's May 5, 2016 Outlook are italicized bold below.
Year Ending
12/31/2016
----------
Adjusted Production
Growth(a) (3%) to 2%
Absolute Production
Liquids - mmbbls 56 - 60
Oil - mmbbls 33 - 35
NGL - mmbbls 23 - 25
Natural gas - bcf 1,030 - 1,070
Total absolute production -
mmboe 228 - 238
Absolute daily rate - mboe 625 - 650
Estimated Realized Hedging Effects(b) (based on 8/1/16 strip
prices):
Oil - $/bbl $4.63
Natural gas - $/mcf $0.13
NGL - $/bbl ($0.18)
Estimated Basis to NYMEX Prices:
Oil - $/bbl $2.55 - $2.65
Natural gas - $/mcf $0.35 - $0.45
NGL - $/bbl $5.20 - $5.45
Operating Costs per Boe of Projected Production:
Production expense $3.20 - $3.40
Gathering, processing and
transportation expenses $7.60 - $8.10
Oil - $/bbl $3.75 - $3.95
Natural Gas(c) - $/mcf $1.40 - $1.50
NGL - $/bbl $7.60 - $7.85
Production taxes $0.35 - $0.45
General and
administrative(d) $0.60 - $0.70
Stock-based compensation
(noncash) $0.10 - $0.20
DD&A of natural gas and
liquids assets $3.50 - $4.50
Depreciation of other
assets $0.40 - $0.50
Interest expense(e) $1.05 - $1.15
Marketing, gathering and
compression net margin(f) ($10) - $10
Book Tax Rate 0%
Capital Expenditures ($ in
millions)(g) $1,000 - $1,500
Capitalized Interest ($ in
millions) $260
Total Capital Expenditures
($ in millions) $1,260 - $1,760
(a) Based on 2015 production of 621
mboe per day, adjusted for 2015
and 2016 sales.
(b) Includes expected settlements for
commodity derivatives adjusted for
option premiums. For derivatives
closed early, settlements are
reflected in the period of
original contract expiration.
(c) Excludes a 2016 fourth quarter
minimum volume commitment (MVC)
shortfall estimate of
approximately $165 to $175
million.
(d) Excludes expenses associated with
stock-based compensation.
(e) Excludes unrealized gains (losses)
on interest rate derivatives.
(f) Includes revenue and operating
expenses. Excludes depreciation
and amortization of other assets
and unrealized gains (losses) on
supply contract derivatives.
(g) Includes capital expenditures for
drilling and completion,
leasehold, geological and
geophysical costs, rig termination
payments and other property and
plant and equipment. Excludes
approximately $259 million for the
repurchase of overriding royalty
interests associated with the sale
of certain of the company's
properties and any additional
proved property acquisitions.
Oil, Natural Gas and Natural Gas Liquids Hedging Activities
Chesapeake enters into commodity derivative transactions in order to mitigate a portion of its
exposure to adverse changes in market prices. Please see the quarterly reports on Form 10-Q
and annual reports on Form 10-K filed by Chesapeake with the SEC for detailed information about
derivative instruments the company uses, its quarter-end derivative positions and accounting
for oil, natural gas and natural gas liquids derivatives.
As of August 1, 2016, the company had downside protection, through open swaps, on a portion of
its remaining 2016 oil production at an average price of $46.60 per bbl. The company had
downside price protection, through open swaps and two-way collars, on a portion of its
remaining 2016 natural gas production at an average price of $2.77 per mcf. Chesapeake also had
downside price protection, through open swaps, on a portion of its remaining 2016 ethane and
propane production at an average price of $0.17 per gallon and $0.46 per gallon, respectively.
The company's crude oil hedging positions as of August 1, 2016 were as follows:
Open Crude Oil Swaps; Gains from Closed
Crude Oil Trades and Call Option Premiums
Open Swaps Avg. NYMEX Total Gains
from
Closed
Trades
(mbbls)
Price of and
Premiums
for
Open Swaps Call
Options
($ in
millions)
----------
Q3 2016 6,072 $46.35 $10
Q4 2016 6,072 $46.84 10
Total 2016 (a) 12,144 $46.60 $20
============= ====== ====== ===
Total 2017 -
2022 7,665 $47.79 $78
============ ===== ====== ===
(a) Certain hedging arrangements include a sold option to extend at an average price of $53.67 per bbl covering 1.5 mmbbls in 2016. Sold
options are included with net written call options.
Crude Oil Net Written Call Options
Call Options Avg. NYMEX
(mbbls) Strike Price
------ ------------
Q3 2016 3,489 $87.25
Q4 2016 3,488 $87.25
Total 2016 6,977 $87.25
========== ===== ======
Total 2017 5,293 $83.50
========== ===== ======
The company's natural gas hedging positions as of August 1, 2016 were as follows:
Open Natural Gas Swaps; Losses from Closed
Natural Gas Trades and Call Option Premiums
Open Swaps Avg. NYMEX Total
Losses
(bcf) Price of from
Closed
Trades
Open Swaps and
Premiums
for
Call
Options
($ in
millions)
----------
Q3 2016 203 $2.69 $(26)
Q4 2016 155 $2.85 (28)
Total 2016 (a) 358 $2.76 $(54)
============= === ===== ====
Total 2017 -
2022 267 $3.02 $(78)
============ === ===== ====
(a) Certain hedging arrangements include a sold option to extend at an average price of $2.80 per mmbtu covering 52 bcf in 2016. Sold options are included with
net written call options.
Natural Gas Two-Way Collars
Open Avg. Avg.
Collars NYMEX NYMEX
(bcf) Bought Put Sold Call
Price Price
----- -----
Q4 2016 15 $3.00 $3.48
Total 2016 15 $3.00 $3.48
========== === ===== =====
Total 2017 23 $3.00 $3.48
========== === ===== =====
Natural Gas Net Written Call Options
Call Options Avg. NYMEX
(bcf) Strike Price
---- ------------
Q3 2016 45 $5.27
Q4 2016 46 $5.27
Total 2016 91 $5.27
========== === =====
Total 2017 - 2022 114 $10.92
================= === ======
Natural Gas Basis Protection Swaps
Volume Avg. NYMEX
plus/(minus)
(bcf)
----
Q3 2016 12 $(0.66)
Q4 2016 10 $(0.26)
Total 2016 22 $(0.49)
========== === ======
Total 2017 - 2022 27 $(0.34)
================= === ======
The company's natural gas liquids hedging positions as of August 1, 2016 were as follows:
Open Ethane Swaps
Volume Avg. NYMEX
Price of Open
(mmgal) Swaps
------ -----
Q3 2016 58 $0.17
Q4 2016 20 $0.17
Total 2016 78 $0.17
========== === =====
Open Propane Swaps
Volume Avg. NYMEX
Price of Open
(mmgal) Swaps
------ -----
Q3 2016 50 $0.46
Q4 2016 17 $0.46
Total 2016 67 $0.46
========== === =====
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/chesapeake-energy-corporation-reports-2016-second-quarter-financial-and-operational-results-300309109.html
SOURCE Chesapeake Energy Corporation
