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Tuesday, October 30, 2018

-=Chesapeake Energy (CHK) reported earnings on Tue 30 Oct 2018 (b/o)

Chesapeake Energy beats by $0.04, reports revs in-line
  • Reports Q3 (Sep) earnings of $0.19 per share, excluding non-recurring items, $0.04 better than the S&P Capital IQ Consensus of $0.15; revenues rose 22.5% year/year to $1.2 bln vs the $1.19 bln S&P Capital IQ Consensus.
  • Chesapeake's average daily production for the 2018 third quarter was approximately 537,000 boe compared to approximately 542,000 boe in the 2017 third quarter.
  • "Chesapeake continues to make significant progress on our strategic priorities, as demonstrated by our improved cash flow from operations, which was more than 50 percent higher than the 2017 third quarter due to higher average realized commodity prices and 13 percent growth in our adjusted oil production. We plan to focus the vast majority of our projected 2019 activity on our high-margin, higher-return oil opportunities in the PRB and Eagle Ford Shale, while decreasing capital and activity directed toward our natural gas portfolio, which will generate additional free cash flow. Our capital expenditures for 2018 remain on track, as we execute on our priorities of reducing leverage, increasing margins and reaching sustainable positive cash flow, and we expect continued progress in 2019."
  • Sees FY18 production Growth adjusted for asset sales of 1% to 5%.
  • Announces $3.977 bln deal to acquire WildHorse Resource Development (WRD).

  • WildHorse Resource Development to be acquired by Chesapeake Energy (CHK) for approximately $3.977 bln
    At the election of each WildHorse common shareholder, the consideration will consist of either 5.989 shares of Chesapeake common stock or a combination of 5.336 shares of Chesapeake common stock and $3 in cash, in exchange for each share of WildHorse common stock.
    • Projected to double adjusted oil production by 2020 from stand-alone adjusted 2018 estimates, increasing to a projected range of 125,000 to 130,000 barrels (bbls) of oil per day in 2019, and 160,000 to 170,000 bbls of oil per day in 2020; Chesapeake's 2020 projected adjusted oil production mix is expected to increase to approximately 30% of total production, compared to approximately 19% today
    • Increases projected EBITDA per barrel of oil equivalent (boe) margin by approximately 35% in 2019 and by approximately 50% in 2020, based on current strip prices
    • $200 to $280 million in projected average annual savings, totaling $1 to $1.5 billion by 2023, due to operational and capital efficiencies as a result of Chesapeake's significant expertise with unconventional assets and technical and operational excellence; incremental savings through elimination of redundant corporate overhead, gathering, processing and transmission synergies and improved capital markets execution due to improved credit metrics

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