Chesapeake Energy Corp. (NYSE: CHK) reported fourth-quarter and full-year 2015 earnings before markets opened Wednesday. For the quarter, the oil and gas exploration and production company posted an adjusted net loss per share of $0.16 on revenues of $2.65 billion. In the same period a year ago, the company reported adjusted earnings per share (EPS) of $0.38 on revenues of $5.7 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for a net loss per share of $0.17 and $2.63 billion in revenues.
For the full year, Chesapeake reported a net loss of $0.20 per share and revenues of $12.76 billion, compared with earnings per share of $1.49 and revenues of $23.13 billion in 2014. Analysts had estimated a per-share net loss of $0.22 and revenues of $11.38 billion.
On a GAAP basis, the company reported a quarterly net loss of $2.23 billion ($3.36 per diluted share). The primary cause of the loss was a $2.83 billion noncash drop in the carrying value of Chesapeake’s oil and gas assets due to the low prices for oil and natural gas. In the third quarter the company took a similar impairment charge of $4.7 billion.
For the full-year, the GAAP net loss totaled $22.43 per share, again due to a non-cash impairment charge of $18.24 billion in the company’s carrying value of oil and gas assets. Chesapeake’s total pretax loss for the year amounted to $19.1 billion, virtually all of it due to low commodity prices.
Chesapeake focused on its 2016 forecast and who can blame it? Capital spending this year is forecast in a range of $1.3 billion to $1.8 billion, a year-over-year drop of 57% at the midpoint of the range from the 2015 capex total of $3.6 billion. About 70% of the spending is targeted for well completion. That means the company is going to focus on generating cash in the current low-price environment, a smart move, but maybe not enough to encourage investors.
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