* Fourth-quarter adj profit $0.27/share vs est $0.41
* Takes $320 mln charge to repay debt early; other one-time
* Shares fall as much as 8 percent
(Adds comments by chief executive, financial details, updates
Feb 26 Chesapeake Energy Corp reported
quarterly results that missed Wall Street estimates by a wide
margin because of weak production, sending its shares sharply
lower on Wednesday.
In the past year the company has been aggressively trying to
repair its balance sheet and cut high spending programs put in
place by Aubrey McClendon, Chesapeake's co-founder and former
chief executive officer.
As a result, the company recorded one-time charges of $320
million during the fourth quarter. The cleanup operation has
been seen by analysts as a distraction from the company's
ability to increase oil and natural gas production.
Chesapeake's stock fell as much as 8 percent on the New York
Stock Exchange on Wednesday morning.
Trying to calm concerns, Doug Lawler, who became CEO last
June, promised that most of the charges were behind the company.
"We believe that most of the charges related to our
organizational restructuring are in the rear view mirror and we
look forward to reporting fewer adjustments to earnings going
forward," he told analysts on a conference call.
The company is negotiating a civil settlement with Michigan
officials to try to end a criminal investigation into whether it
colluded to keep oil and gas lease prices artificially low in
Lawler and other current executives are also contending with
plans by a McClendon-run firm to force Chesapeake to drill 12
multimillion-dollar wells in Louisiana's Haynesville Shale, a
step that would run counter to plans to reduce corporate costs.
Chesapeake's average fourth-quarter production of 665,100
barrels of oil equivalent disappointed analysts, despite rising
2 percent from the same period last year. Heavy rain and cold
weather in Texas led largely to the miss.
The Oklahoma City, Oklahoma-based company posted a net loss
of $159 million, or 24 cents per share, compared with net income
of $250 million, or 39 cents per share, in the year-ago period.
Excluding one-time charges to cull debt and simplify its
balance sheet, Chesapeake said it earned 27 cents per share.
By that measure, analysts, on average, expected earnings of
41 cents per share, according to Thomson Reuters I/B/E/S.
Fourth-quarter revenue rose 28 percent to $4.54 billion,
missing the average analyst estimate of $4.86 billion.
Average production expenses inched up 2 percent from the
third quarter, while general and administrative expenses rose 5
Chesapeake said earlier this month it would cut spending by
20 percent this year and sell assets to plug a $1 billion gap
between operating cash flow and capital expenditure.
Lawler promised that such practices will fade away.
"We no longer need to divest assets to survive or fund our
drilling capital program," he said.
Chesapeake shares were down 6.2 percent at $25.28 in
midmorning trading, off an earlier low at $24.76.
(Reporting by Ernest Scheyder in New York and Swetha Gopinath
in Bangalore; editing by Sriraj Kalluvila and Matthew Lewis)