Natural gas producer Chesapeake Energy has reported a net loss of $227m for the second quarter (Q2) of 2024, a stark contrast to the net income of $391m recorded in the corresponding quarter of 2023.
For the three months ending 30 June 2024, the company’s total revenues also declined, falling to $505m from the $1.89bn reported a year ago.
The decline in Chesapeake’s net income and revenue comes amid lower gas prices and production.
This downturn reflects a broader trend, with revenues from natural gas, oil and natural gas liquids (NGLs) dropping to $378m from $649m.
The marketing segment, previously a key revenue contributor, also experienced a decline, generating $136m compared with $611m in the prior year.
Amidst its pending merger with Southwestern Energy, the company’s production during the April–June quarter decreased by 24.9% to 2.75 billion cubic feet per day.
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By GlobalDataChesapeake’s operating expenses for Q2 2024 were $799m, down from $1.37bn a year earlier.
A decline was observed in production costs, which fell from $89m to $49m, and in gathering, processing and transportation expenses, which dropped from $207m to $154m.
In the first half (H1) of 2024, Chesapeake’s total revenues reached $1.58bn, a downturn from the $5.26bn in H1 2023.
Net income for the six-month period also saw a drastic shift to a loss of $201m, as against a profit of $1.78bn in the preceding year.
Despite the financial challenges, Chesapeake is planning to distribute its base dividend of $0.575 per share on 5 September 2024, to stockholders recorded at the close of business on 15 August 2024.
Chesapeake president and CEO Nick Dell’Osso said: “We continue to execute our business as we prudently manage current market conditions and prepare for our pending combination with Southwestern. We remain focused on operational improvements and enhancing capital efficiency.
“The efforts of our team have positioned us to lower our 2024 capital and production expense guidance by $50m and approximately 8%, respectively. Importantly, we expect these improvements will be durable through cycles, positioning us to lower our breakeven costs while we build productive capacity to more efficiently reach consumers when demand recovers.”
