The Suburbanite
  • Chesapeake optimistic after year-end loss

  • Chesapeake Energy closed 2012 with a loss in part because of low natural gas prices. But the company is optimistic about the coming year, noting that it has increased its oil and liquid natural gas production, while pulling back in dry gas.

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  • Chesapeake Energy ended 2012 with a loss, but the results released Thursday proved better than most analysts had expected.
    The Oklahoma City-based company also offered more insight on development of its Utica shale holdings throughout eastern Ohio.
    The company posted a net loss of $940 million, or $1.46 per share, compared with earnings of $1.57 billion, or $2.32 per share, in 2011. The loss came because of charges associated with the write down on the value of its natural gas-producing property. Those values can shift from year to year, and would rise with the price of natural gas.
    Revenue for 2012 rose 5.9 percent to $12.3 billion.
    Chesapeake earned $257 million, or 39 cents per share, for the fourth quarter that ended Dec. 31. That was down from $429 million, or 63 cents per share, during the same period last year. Revenue rose almost 30 percent to $3.54 billion, from $2.73 billion the previous year.
    Lower natural gas prices again were blamed for the fourth quarter revenue decline.
    Chesapeake noted the lower natural gas prices throughout 2012, and said the lower prices pushed the company toward developing more oil and wet gas areas. Chesapeake spent much of the year selling different business holdings — including its midstream operations — in a bid to restructure its finances.
    The company has been focused on developing eastern Ohio’s Utica shale for three years now. Chesapeake, which plans to build a corporate campus in Louisville, claims the largest lease hold in the region and holds nearly 400 permits to drill horizontal wells. So far it has drilled 184 wells, with 45 of them producing.
    “We believe we’ve captured the industry’s largest position in the Utica, and look forward to solid results in this play for years to come,” said Steven C. Dixon, Chesapeake’s chief operating officer.
    Utica development has been slow as Chesapeake waits for wet gas processing facilities to begin operating. Several are expected to begin operating later this year.
    Chesapeake has 88 rigs drilling at different areas around the country, with 14 of them working in the Utica shale. Dixon said the company is focusing on more than 450,000 acres that are part of a joint venture with Total E&P, a French oil and gas company.
    All of Carroll County, where Chesapeake has been most active, is part of the Total joint venture. Chesapeake touted high oil and liquid natural gas production levels at several Carroll County wells.
    Thursday’s announcement was the first without Aubrey McClendon leading the discussion with stock analysts. He is retiring as chief executive officer April 1.
    Chesapeake shares closed at $20.15 on Thursday, down 9 cents in above average trading.

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