Chesapeake Energy jumps after beating quarterly earnings estimates

A Chesapeake Energy Corp. worker takes a break at a Chesapeake oil drilling site on the Eagle Ford shale near Crystal City, Texas.

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A Chesapeake Energy Corp. worker takes a break at a Chesapeake oil drilling site on the Eagle Ford shale near Crystal City, Texas.
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Reuters/Anna Driver

Shares of Chesapeake Energy climbed nearly 20% on Thursday morning after the petroleum and natural gas company reported fourth-quarter earnings that beat Wall Street’s forecasts.

Chesapeake reported an adjusted earnings of $0.30 per share, topping Wall Street’s estimates of $0.24 per share. Its quarterly revenues were $2.59 billion, above expectations of $2.28 billion.

The company said that it expects production growth in 2018 to match last year’s, while lowering capital investments by 12%. Energy companies have faced mounting pressure by investors to increase production while cutting costs.

A few weeks ago, the Oklahoma City-based company laid off 400 workers, or 13% of its total workforce. The cuts follow Chesapeake’s sale of some of its well assets, which also led to job cuts among its field workers.

“Fiscal year 2017 was a pivotal year for Chesapeake, as we restored our production and increased net cash provided by operations, increased our oil production, adjusted for asset sales, and significantly improved our cost structure,” Chesapeake CEO Doug Lawler stated in a release.

The company reduced the costs of production, general administration, gathering, processing, and transportation by roughly $510 million, or down 18% compared to the year prior, he said.

Chesapeake Energy’s stock was trading at $3.07 per share, though it was down 30.4% for the year.

Read more about what happened to Chesapeake Energy’s stock after it announced its latest round of layoffs.

Chesapeake Energy stock price

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Markets Insider