CHK Stock Hits a New Low After Disappointing Quarterly Earnings

CHK stock

CHK stock is under pressure on Wednesday after offshore exploration company Chesapeake Energy Corporation (NYSE:CHK) reported its fourth-quarter results. The company’s losses in the quarter were actually lower than what had been expected, but even still, its natural gas, oil, and natural gas liquids revenues fell sharply.

Reports Net Losses

The revenue from those channels crashed by as much as 44% year-on-year, and the unadjusted net losses came in at $346 million. It should be noted that in the year-ago period, Chesapeake Energy had actually made an unadjusted profit of $576 million.

On the other hand, the company reported a 2.8% growth year-on-year in terms of production for the quarter, which hit 477 boe/day. In addition to that, oil output soared by as much as 45% and made up 26% of Chesapeake’s total production.

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This proved to be the highest oil mix level in the company’s history. In the same quarter last year, the oil mix level was 19%. Despite all this, Chesapeake’s performance did not quite thrill the market today, and CHK stock tanked by 16.50% in the morning session to a new low of $0.37.

Despite the temporary gloom in the market today, it is important to point out that although the prices of Chesapeake’s oil, natural gas liquid, and natural gas were lower on average, the company still managed to eke out better margins. Chesapeake Energy was able to achieve that by cutting down on its costs for processing, transportation, and gathering. In addition to that, the company managed to cut down on G&A expenses as well.

Lastly, the company also revealed that it is going to lower its capital spending for 2020 by around 30%. From $2.25 billion in 2019, the capital spending budget for 2020 is going to be in the $1.3 billion to $1.6 billion range.

CHK stock has lost over 60% so far this year.

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