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UPDATE 2-Chesapeake profit tops Street estimate, review underway
August 1, 2013 / 11:42 AM / in 4 years

UPDATE 2-Chesapeake profit tops Street estimate, review underway

(Updates share price, adds analyst and conference call
    By Anna Driver
    Aug 1 (Reuters) - Chesapeake Energy Corp's new Chief
Executive Doug Lawler on Thursday said a comprehensive review of
the company's partnerships and assets is underway as the second
largest U.S. natural gas provider seeks to simplify its
structure and improve financial discipline.
    The company, which experienced a severe liquidity crunch in
2012 after spending heavily for years to acquire drilling
acreage, also reported a better-than-expected quarterly profit
on Thursday as it produced more crude oil than Wall Street
    Investors, who have for a long-time lobbied the company to
streamline its operations, pushed the company's shares up 7
percent in late morning trading. The stock rose the highest
level in more than a year.
    Mark Hanson, oil analyst with Morningstar said Chesapeake's
oil volumes where higher-than-expected on both a year-over-year
and sequential basis. He also noted the company reduced its
capital spending plans for 2013 and has only spent $100 million
on undeveloped land so far this year.
    "New Chesapeake wouldn't recognize old Chesapeake if they
passed each other on the street," he said.
    This is the first quarter that Chesapeake has reported
earnings under Lawler, who was named to replace former CEO
Aubrey McClendon in May. McClendon left the company he
co-founded earlier this year after a series of Reuters
investigations triggered civil and criminal probes of the
    Lawler, a former executive with Anadarko Petroleum Corp
, declined to provide many details about the review that
he and other senior managers are conducting. But he said that
everything will get a comprehensive look.
    The general aim is to "reduce the complexity and provide
better clarity on where we are getting our best returns," Lawler
told analysts on a conference call. He said we would refrain
from saying any asset is untouchable.         
    Shares of Chesapeake rose $1.55 to $24.85 in late morning
New York Stock Exchange trading.
    Chesapeake, said oil production in the quarter rose 44
percent to 116,000 barrels per day (bpd), with much of the
growth coming from its properties in the Eagle Ford Shale in
south Texas. It raised its crude output forecast for the full
    Analysts at Bernstein Research had estimated Chesapeake's
oil production at 105,000 bpd in the quarter.
    Second-quarter profit at the Oklahoma City-based company
fell to $457 million, or 66 cents per share, from $929 million,
or $1.29 per share, a year earlier.
    But adjusting for one-time items, Chesapeake had a profit of
51 cents per share. Analysts, on average, expected 41 cents per
share, according to Thomson Reuters I/B/E/S. 

 (Reporting by Anna Driver; Editing by Gerald E. McCormick,
Jeffrey Benkoe and Sofina Mirza-Reid)

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