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Chesapeake Energy Corporation Reports Financial And Operational Results For The 2013 Second Quarter

Stocks in this article: CHK

Marcellus Shale (Pennsylvania, West Virginia) : The company’s production from the Marcellus Shale continued to grow during the 2013 second quarter, benefiting from the availability of downstream takeaway capacity and the completion of wells in backlog. Chesapeake connected 131 wells to sales during the 2013 second quarter, which was substantially more than the 52 wells connected during the 2013 first quarter. Approximately 2% of the company’s Marcellus production during the 2013 second quarter was oil, 3% was NGL and 95% was natural gas.

During the 2013 second quarter, Chesapeake’s average daily net production in the northern dry- gas portion of the Marcellus was approximately 780 mmcfe per day (1,810 gross operated mmcfe per day), an increase of 58% year over year and 11% sequentially. The average peak daily production rate of the 79 wells that commenced first production during the 2013 second quarter in the northern Marcellus was approximately 9 mmcfe per day.

Chesapeake is currently operating five rigs in the northern dry-gas portion of the play and anticipates maintaining this activity level for the remainder of 2013. Average spud-to-spud cycle time during the 2013 second quarter was 29 days, down from 31 days a year ago. As of June 30, 2013, Chesapeake had an inventory of 144 drilled but uncompleted and/or unconnected wells in the northern Marcellus.

During the 2013 second quarter, Chesapeake’s average daily net production in the southern wet-gas portion of the Marcellus was approximately 208 mmcfe per day (355 gross operated mmcfe per day), an increase of 56% year over year and 23% sequentially. The average peak daily production rate of the 52 wells that commenced first production during the 2013 second quarter in the southern Marcellus was approximately 6.5 mmcfe per day.

Chesapeake is currently operating three rigs in the southern wet-gas portion of the play, which it plans to reduce to two rigs by year end. Average spud-to-spud cycle time during the 2013 second quarter was 21 days, down from 33 days a year ago. As of June 30, 2013, Chesapeake had an inventory of 76 drilled but uncompleted and/or unconnected wells in the southern Marcellus.

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