Chesapeake Hammered For a 12% Loss On Poor Results and Large Impairment (CHK)

Down 97 cents (12.19%) to $7.03.
It appears the company is producing flat out.
And it isn't enough.

From Bloomberg:
Chesapeake Mulls Joint Ventures as Bleak Outlook Slams Stock

Chesapeake Energy Corp., the worst-performing stock on the Standard & Poor’s 500 this year, is in discussions to sell more assets or stakes in oil fields as the prospect of a prolonged energy-market slump imperils cash flow.

Chief Executive Officer Doug Lawler is leaning toward joint ventures rather than whole asset sales because they would allow Chesapeake’s engineers, geologists and physicists to take the lead in developing natural gas and oil formations they’ve been studying for years. Any proceeds would be used to accelerate drilling in the company’s most-promising fields or to pay off debt, he said in a conference call with analysts Wednesday.

The Oklahoma City-based gas explorer on Wednesday posted a second-quarter net loss of $4.1 billion, or $6.27 a share, including a $3.67 billion writedown on the value of its oil and gas assets. Shares fell 12 percent to $7.03 at the close of trading in New York.

Earlier shares were down as much as 14 percent to $6.85, the lowest intraday price since December 2002, after Lawler said he sees the rout in energy markets persisting through the end of 2016.

Lawler said he isn’t worried about low commodity prices deflating offers from potential partners. Any investors considering taking stakes in the company’s fields are focused on how much crude and gas they will yield and at how cheap a per-unit cost, he said.

“All across the industry we’re going to see more and more focus on the rock quality,” Lawler said during the call.

Lawler has been selling assets and dismantling complex financial commitments to free up cash for drilling and reduce debt since he succeeded Aubrey McClendon in June 2013.

Rising Production
Full-year gas and crude output will exceed previous forecasts by 4 percent, Lawler said.
Chesapeake pumped the equivalent of 703,000 barrels of crude a day during the quarter, surpassing every analyst estimate. The company plans to raise 2015 production without using any additional cash because its crews have knocked down the costs involved in drilling and starting production from fields in places like Ohio, the Rocky Mountains and Texas....MORE

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