Chesapeake Energy Q1 Loss Narrows; Adj. Loss Meets View; To Sell STACK Acreage

(RTTNews) - Oil and gas company Chesapeake Energy Corp. (CHK) reported Thursday that its first-quarter net loss available to common stockholders was $964 million, or $1.44 per share, narrower than last year's loss of $3.78 billion or $5.72 per share.

The primary driver of the net loss was a noncash impairment of approximately $853 million, compared to prior year impairment charges of $3.635 billion.

First quarter adjusted net loss available to common stockholders was $120 million or $0.10 per share, compared to last year's profit of $42 million or $0.11 per share.

On average, 30 analysts polled by Thomson Reuters expected loss of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.

Chesapeake's 2016 first quarter revenues declined 39% to $1.95 billion from $3.22 billion last year. Analysts were looking for revenues of $2.55 billion.

Revenue declines due to lower commodity prices were partially offset by improvements to the company's production expenses and general and administrative (G&A) expenses.

Average daily production of approximately 672,400 barrels of oil equivalent (boe) increased 1%, adjusted for asset sales.

Separately, Newfield Exploration Co. (NFX) said it signed a definitive purchase and sale agreement with a subsidiary of Chesapeake Energy to acquire approximately 42,000 net acres in the Anadarko Basin STACK play for $470 million. The transaction will have an effective date of April 1, and closing is subject to customary adjustments. Newfield expects to fund the transaction with cash on hand and closing is planned for the second quarter of 2016.

In its statement, Chesapeake said the STACK acreage sale accelerates value from a portion of its undeveloped acreage that currently generates very little cash flow.. This transaction contributes substantially to achieving previously announced target of an incremental $500 million to $1 billion of asset sales by year-end. The company expects subsequent divestitures during the second and third quarters.

Further, the company reiterated target of $1.2 to $1.7 billion total gross proceeds from asset divestitures by year-end.

In pre-market activity, Chesapeake shares were gaining around 10.97 percent at $6.27.