July 28, 2011 / 8:30 PM / 6 years ago

UPDATE 3-Chesapeake profit up, Utica rigs planned

* Five rigs drilling in Utica

* 2011, 2012 capex raised

* Shares rise 2 percent after earnings report (Adds analyst comment, details from release, byline)

By Anna Driver

HOUSTON, July 28 (Reuters) - Chesapeake Energy Corp (CHK.N) said on Thursday its quarterly profit doubled, and the second-largest U.S. natural gas producer also said it was raising capital expenditures to drill in its oil-rich Utica shale play.

Investors are anxious for details about Chesapeake's activity in the Utica -- a huge field with oil and gas exploration centered in eastern Ohio and western Pennsylvania -- that some see as the next big onshore oil play.

Chesapeake has been quietly acquiring acreage in Ohio and there has been talk in analyst notes of the possibility of some big wells there.

Chesapeake said it has five rigs drilling on its 1.25 million acres in the Utica and expects to increase that figure to eight by the end of the year.

After two years of analysis and test drilling, Chesapeake characterized the field as "economically superior" to the red-hot Eagle Ford in South Texas, where land values have climbed to $20,000 an acre.

"They gave a little color on the Utica, which was good," Mark Hanson, analyst at Morningstar, said. "We knew they were up there, but we didn't have any details about their activity."

Chesapeake will like have to take on a joint venture partner to fund drilling in the Utica, Hanson said. The company said it was "currently conducting a competitive process to monetize" part of its Utica holdings.

No well data production for the Utica was provided, information that some analysts had expected.

Citing oilfield inflation and an accelerated drilling program in the Utica Shale play, the company raised its planned capital expenditures in 2011 and 2012 by $500 million to a range of $6 billion to $6.5 billion for each year.

The Oklahoma City, Oklahoma, company said its profit was $467 million, or 68 cents per share, compared with $235 million, or 37 cents per share, a year earlier.

Excluding items, Chesapeake had a profit of 76 cents per share. Analysts on average had expected a profit of 72 cents per share, according to Thomson Reuters I/B/E/S.

Chesapeake said output rose 9 percent in the second quarter, and raised its production forecast for the two-year period ending with 2012 by 20 percent.

Shares of Chesapeake rose 1.9 percent to $34.05 from a New York Stock Exchange close of $33.43 after the earnings report. (Reporting by Anna Driver in Houston; editing by Gunna Dickson, Gary Hill)

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