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TheStreet Open House

Chesapeake Energy Corporation Reports Financial And Operational Results For The 2011 Fourth Quarter And Full Year

Stocks in this article: CHK

Key Operational and Financial Statistics Summarized

The table below summarizes Chesapeake’s key results during the 2011 fourth quarter and compares them to results during the 2011 third quarter and the 2010 fourth quarter and also compares the 2011 full year to the 2010 full year.

    Three Months Ended     Full Year Ended
12/31/11   9/30/11   12/31/10 12/31/11   12/31/10
Average daily production (in mmcfe) (a) 3,596 3,329 2,920 3,272 2,836
Natural gas equivalent production (in bcfe) 331 306 269 1,194 1,035
Natural gas equivalent realized price ($/mcfe) (b) 5.08 5.78 5.87 5.70 6.09
Oil and NGL (liquids) production (in mbbls) 9,767 8,669 5,562 31,676 18,395
Liquids as % of total production 18 17 12 16 11
Average realized liquids price ($/bbl) (b) 64.12 63.03 62.62 63.90 62.71
Liquids as % of realized revenue 37 31 22 30 18
Liquids as % of unhedged revenue 47 40 34 40 25
Natural gas production (in bcf) 272 254 235 1,004 925
Natural gas as % of total production 82 83 88 84 89
Average realized natural gas price ($/mcf) (b) 3.87 4.82 5.22 4.77 5.57
Natural gas as % of realized revenue 63 69 78 70 82
Natural gas as % of unhedged revenue 53 60 66 60 75
Marketing, gathering and compression net margin ($/mcfe) (c) 0.07 0.10 0.13 0.10 0.12
Oilfield services net margin ($/mcfe) (c) 0.09 0.11 0.05 0.10 0.03
Production expenses ($/mcfe) (0.88 ) (0.92 ) (0.90 ) (0.90 ) (0.86 )
Production taxes ($/mcfe) (0.15 ) (0.16 ) (0.14 ) (0.16 ) (0.15 )
General and administrative costs ($/mcfe) (d) (0.35 ) (0.41 ) (0.34 ) (0.38 ) (0.36 )
Stock-based compensation ($/mcfe) (0.06 ) (0.08 ) (0.08 ) (0.08 ) (0.08 )
DD&A of natural gas and liquids properties ($/mcfe) (1.46 ) (1.38 ) (1.37 ) (1.37 ) (1.35 )
D&A of other assets ($/mcfe) (0.26 ) (0.24 ) (0.23 ) (0.24 ) (0.21 )
Interest income (expense) ($/mcfe) (b) (0.04 ) (0.01 ) 0.01 (0.03 ) (0.08 )
Operating cash flow ($ in millions) (e) 1,311 1,409 1,370 5,309 5,168
Operating cash flow ($/mcfe) 3.96 4.60 5.10 4.45 4.99
Adjusted ebitda ($ in millions) (f) 1,308 1,385 1,274 5,406 5,083
Adjusted ebitda ($/mcfe) 3.95 4.52 4.75 4.53 4.91
Net income to common stockholders ($ in millions) 429 879 180 1,570 1,663
Earnings per share – diluted ($) 0.63 1.23 0.28 2.32 2.51
Adjusted net income to common stockholders ($ in millions) (g) 394 496 478 1,936 1,971
Adjusted earnings per share – diluted ($) 0.58 0.72 0.70 2.80 2.95
(a)   Includes effect of the Fayetteville Shale asset sale to BHP Billiton on March 31, 2011 (which had an average production loss impact of approximately 400 mmcfe per day in both the 2011 fourth and third quarters and approximately 300 mmcfe per day for the 2011 full year) and the VPP #9 sale in May 2011 (which had an average production loss impact of approximately 70 mmcfe per day in the 2011 fourth and third quarters and approximately 45 mmcfe per day for the 2011 full year).
(b) Includes the effects of realized gains (losses) from hedging, but excludes the effects of unrealized gains (losses) from hedging.
(c) Includes revenue and operating costs and excludes depreciation and amortization of other assets.
(d) Excludes expenses associated with non-cash stock-based compensation.
(e) Defined as cash flow provided by operating activities before changes in assets and liabilities.
(f) Defined as net income before income taxes, interest expense, and depreciation, depletion and amortization expense, as adjusted to remove the effects of certain items detailed on pages 21.
(g) Defined as net income available to common stockholders, as adjusted to remove the effects of certain items detailed on pages 22 and 23.
 

2011 Full Year Average Daily Production Increases 15% over 2010 Full Year Average Daily Production, Setting Record for 22 nd Consecutive Year; 2011 Fourth Quarter Liquids Production Increases 76% Year over Year and Delivers 18% of Total Production and 47% of Unhedged Natural Gas and Liquids Revenue

Chesapeake’s daily production for the 2011 fourth quarter averaged 3.596 bcfe, an increase of 8% from the average 3.329 bcfe produced per day in the 2011 third quarter and an increase of 23% from the average 2.920 bcfe produced per day in the 2010 fourth quarter. Chesapeake’s average daily production of 3.596 bcfe for the 2011 fourth quarter consisted of approximately 2.959 billion cubic feet of natural gas (bcf) (82% on a natural gas equivalent basis) and approximately 106,000 barrels (bbls) of oil and natural gas liquids (collectively “liquids”) (18% on a natural gas equivalent basis). For the 2011 fourth quarter, the company’s year-over-year growth rate of natural gas production was 16% and its year-over-year growth rate of liquids production was 76%, or approximately 46,000 bbls per day. The company’s percentage of revenue from liquids in the 2011 fourth quarter was 47% of total unhedged natural gas and liquids revenue compared to 40% in the 2011 third quarter and 34% in the 2010 fourth quarter.

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