OKLAHOMA CITY - Chesapeake Energy Corporation (NASDAQ:NYSE:CHK) announced its fourth-quarter earnings, surpassing analyst expectations with an adjusted EPS of $1.31, significantly higher than the consensus estimate of $0.72.
Despite the earnings beat, Chesapeake's stock fell 2.7% following the release, driven by investor reactions to the company's capital plan, which projects a baseline guide of 2.65 – 2.75 billion cubic feet per day (bcf/d).
In the fourth quarter, Chesapeake reported net cash from operating activities at $470 million and a net income of $569 million, equating to $4.02 per fully diluted share. The adjusted net income stood at $185 million. The company also highlighted its operational efficiency and capital discipline, which resulted in a free cash flow of $91 million for the quarter.
Nick Dell (NYSE:DELL)'Osso, Chesapeake's President and CEO, commented on the company's performance, stating, "2023 marked another year of strong operational performance for Chesapeake as we delivered approximately $840 million to shareholders via our capital return framework despite a challenging commodity price environment." He also emphasized the strategic merger with Southwestern Energy (NYSE:SWN), which is expected to enhance the company's future outlook by extending America's energy reach and positioning Chesapeake to deliver more reliable, affordable, lower carbon energy.
For the full year, Chesapeake's net cash from operating activities totaled $2.4 billion, with a net income of $2.4 billion, or $16.92 per fully diluted share. The adjusted net income for the year was $702 million, or $4.91 per share, with an adjusted EBITDAX of $2.5 billion and a free cash flow of $551 million. The company also returned approximately $840 million to shareholders, including dividends and share repurchases.
Looking ahead, Chesapeake has lowered its capital expenditure guidance for 2024 by approximately 20% to between $1.25 and $1.35 billion. This adjustment comes as the company plans to reduce rig count and defer completions and turn-in-lines, a move that aims to build short-cycle, capital-efficient productive capacity.
Chesapeake's commitment to environmental, social, and governance (ESG) initiatives is evidenced by the recertification of all assets under the MiQ/EO100™ standard, maintaining 100% responsibly sourced gas certification. The company is also on track to meet its 2035 net zero goal for Scope 1 and Scope 2 greenhouse gas (GHG) emissions, having achieved significant reductions in emissions intensity over the past two years.
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