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Gamble or Scramble: How Would You Play Chesapeake Energy?

PART:
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Part 8
Gamble or Scramble: How Would You Play Chesapeake Energy? PART 8 OF 14

Chesapeake Energy’s Production Forecasts for This Year

Chesapeake’s production guidance for 2017

For 2017, Chesapeake Energy (CHK) has provided a production growth guidance range of 0.0%–4.0%. It expects its total production to rise 15.0% between 4Q17 and 4Q18, driven by rising oil production.

Chesapeake Energy’s Production Forecasts for This Year

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2Q17 key operational highlights and plans for the second half of the year

Chesapeake Energy’s production in 2Q17 was 527.6 Mboepd (thousand barrels of oil equivalent per day). The company noted that it saw a significant increase in its production in July to ~548.0 Mboepd compared to the second-quarter average. CHK expects its production to accelerate further in August, even as it plans to place on production approximately 60 wells in August. In the second half of 2017, CHK expects to turn-in-line (or TIL) approximately 250 wells. That’s more than half of its total TIL wells this year.

CHK’s multi-well TIL projects in the Eagle Ford, Utica, and PRB (Powder River Basin) are expected to provide strong oil production acceleration in the third quarter.

Chesapeake Energy also noted that its rig count would be falling to 14 rigs by the end of 2017, from 18 rigs currently. Of the 18 rigs, seven are located in the Eagle Ford Shale, four in the Mid-Continent regions, three in the Haynesville Shale, two in the PRB, and two in Northeast Appalachia.

CHK’s asset sales this year

In its 2Q17 earnings release, Chesapeake Energy noted that it has sold or agreed to sell assets worth ~$360.0 million so far this year to various private buyers. It closed $95.0 million in asset sales as of June 30, 2017, while ~$265.0 million remains pending. These asset sales are expected to close by the end of 3Q17.

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