Chesapeake Energy ups its financial outlook
US shale player Chesapeake Energy said November 2 it increased its outlook for Ebitdax and raised its quarterly dividend for common shareholders.
Chesapeake reported adjusted net income during the third quarter of $269mn. It also increased its expected 2021 adjusted Ebitdax, a reflection of core earnings, to a range of $2.1bn to $2.2bn. This marks an upward revision from $1.8bn to $1.9bn previously.
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The company said it would increase its quarterly dividend to $0.44 per share, a 27% increase from previous levels.
“Additionally, Chesapeake increased its preliminary 2022 adjusted Ebitdax outlook to $3.2bn to $3.4bn, up from $2.55bn to $2.75bn, with projected results largely based on recent commodity prices,” the company added. “The company expects to seek board approval of its 2022 capital programme later in the month and plans to provide formal 2022 guidance in early 2022.”
The expectation of increased performance followed Chesapeake’s recently-closed acquisition of Vine Energy, a major player in the gas-rich Haynesville shale basin.
Chesapeake Energy put down about $2.2bn to acquire Vine in August. The Haynesville shale is the second-largest natural gas producer behind the Appalachia basin. The US Energy Information Administration expects November production from Haynesville to reach 19.1bn ft3/day, a slight increase from October.
On production performance, Chesapeake said it expected a net increase in output while at the same time maintaining capital discipline. It reported a net average rate of production of approximately 436,000 barrels of oil equivalent/day during the third quarter, with 80% of that in the form of natural gas.
The company currently has 11 rigs in operation across all business units.