Chesapeake Reports $1.8B Loss, Plans to Drill More Wells
OKLAHOMA CITY – The continued drop in energy commodity prices, reduced production, and impairment charges led Chesapeake Energy Corp. to post a loss of $1.197 billion for the three months ended Sept. 30. In announcing the financial results this morning, the company said revenues decline 30% for the period.
Chesapeake, which owns and operates more wells than any other energy exploration company in Ohio’s Utica shale, said the primary drivers for the loss were $616 million in costs related to the company’s exit of the Barnett shale in Texas and an impairment charge of $433 million because of declining asset values due to low commodity prices.
Chesapeake said it helped offset these losses through a 20% reduction in operating expenses year-over-year.
Chesapeake said it completed 80 wells during the quarter, drilled another 63 wells, and connected 105 new wells. The company’s average rig count stood at 11 operating rigs across the country.
In eastern Ohio’s Utica, Chesapeake reported that its wells produced an average of 127,000 barrels of oil equivalent per day during the third quarter, down from 137,000 barrels per day during the second quarter. The company has two rigs operating in the shale play.
Total production across Chesapeake’s oil and gas plays stood at 638,000 barrels of oil equivalent per day. The company said it anticipates production to drop to between 550,000 and 570,000 barrels of oil per day during the fourth quarter.
Chesapeake reported it plans to drill between 50 and 60 wells across its shale holdings during the fourth quarter and place between 100 and 110 wells into production.
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