Chesapeake 1Q profit rises on production gains

OKLAHOMA CITY (AP) -- Chesapeake Energy Corp. said Wednesday that first-quarter net income improved as it boosted production. It raised its oil production guidance for the year.

The company earned $15 million, or 2 cents per share, after paying dividends on preferred shares. A year earlier it lost $71 million, or 21 cents per share.

Revenue rose almost 42 percent to $3.42 billion.

Adjusted profit was 30 cents per share, not counting a hedging loss and costs for the departure of former CEO Aubrey McClendon. The adjusted profit was well ahead of the 26 cents per share and revenue of $3.1 billion predicted by analysts surveyed by FactSet.

Total production rose 9 percent to 4 billion cubic feet of natural gas equivalent per day. Chesapeake expects a 2013 average of 3.965 billion cubic feet of natural gas equivalent per day.

Production of its main product, natural gas liquids, rose 13 percent to 4.88 million barrels. Prices fell 16 percent to $28.25 per barrel.

Natural gas production rose almost 8 percent to 358 billion cubic feet of equivalent. Prices jumped 11 percent to $4.46 per thousand cubic feet of equivalent.

Oil production jumped 54 percent to almost 9.3 million barrels, with prices up 2 percent to $94.85 per barrel.

Overall production is now expected to rise 2 percent for the year — adjusted for planned asset sales and after raising oil production guidance by one million barrels, to a range of 37 million to 39 billion barrels. However, it cut a million barrels from its 2013 natural gas liquids production plans, in part because it is shifting drilling toward more oil-rich properties.

Chesapeake intends to sell $4 billion to $7 billion in assets this year. It has sold about $2 billion so far in deals that have either been signed or finalized. It said there are also a number of other deals "in advanced stages of negotiation." Acting CEO Steven C. Dixon said the money will go to capital spending and to pay down debt.

Chesapeake fell 30 cents to $19.25 in afternoon trading.