OKLAHOMA CITY – Officials at Chesapeake Energy said the company produced 122,000 barrels of oil per day, the highest quarterly oil production in the company’s history.
In a media statement, issued last week, Chesapeake President and CEO Doug Lawler said the company’s oil production increased significantly in 2019.
“Driven by the integration of our Brazos Valley asset, steady growth from the PRB and improved base production performance from South Texas and the Mid-Continent, Chesapeake produced approximately 122,000 barrels of oil per day, the highest quarterly oil production in the company’s history, and oil production comprised approximately 25 percent of our total production mix, also a company record,” he said.
“As highlighted above, we have a significant oil growth runway in 2019 and accordingly, we are raising the mid-point of our full-year oil production guidance by approximately 250,000 barrels. In addition, our focus on cash cost leadership has resulted in reducing our full-year guidance for GP&T and production expenses. We believe the trajectory of our oil volume growth and related higher-margin cash flow from those volumes will move higher as we enter 2020.”
Chesapeake also reported a reduction in operating costs and said it had reduced general and administrative expenses by $57 million.
For the 2019 second quarter, Chesapeake reported net income of $98 million and net income available to common stockholders of $75 million, or $0.05 per diluted share. Adjusting for items typically excluded by securities analysts, the 2019 second-quarter adjusted net loss attributable to Chesapeake was
$158 million or $0.10 per share. Despite lower average prices for its oil and natural gas, Chesapeake’s reported cash margins increased significantly in the 2019 second quarter, compared to the 2018 second quarter, primarily due to a higher oil production mix and a decrease in GP&T and general and administrative expenses. Lawler said he was optimistic about the next year.
“As we formulate our initial 2020 plans, we expect to allocate more capital to oil growth areas, with less capital going toward our gas assets,” Lawler said in a media statement. “As a result, with an approximately flat capital program to 2019, we project our 2020 oil volumes will show double-digit percentage growth over 2019. We look forward to driving further value from our scale, diverse portfolio and capital discipline in 2020 and beyond.”