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Chesapeake Energy’s Production Volumes and Realized Prices

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2Q16 production

Chesapeake Energy’s (CHK) 2Q16 production volumes totaled 657.1 Mboepd (thousand barrels of oil equivalent per day. In comparison, its 2Q15 production volumes were 703 Mboepd.

The majority of its 2Q16 production came in from the Utica Shale, the Marcellus Shale, and the Haynesville Shale.

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Chesapeake’s 2016 production guidance range

Following its Barnett Shale sale announcement, Chesapeake’s 2016 production growth guidance range was updated to 611 Mboepd–638 Mboepd compared to the previous range of 625 Mboepd–650 Mboepd it had forecast in 2Q16. This new guidance represents a fall of 8% at the midpoint compared to CHK’s 2015 production levels.

Meanwhile, peer EQT (EQT) has provided production growth guidance of ~19% at the midpoint for 2016, and Antero Resources (AR) has provided growth guidance of 15% at the midpoint. Noble Energy has provided growth guidance of 6%. Together, these companies make up 9% of the iShares US Oil & Gas Exploration & Production ETF (IEO).

Chesapeake Energy’s 2Q16 realized prices

The average realized price of Chesapeake Energy’s crude oil (OIL) and condensates fell from $71.39 per barrel in 2Q15 to $44.31 per barrel in 2Q16. Its average realized price for natural gas (UNG) fell from $2.35 per thousand cubic feet in 2Q15 to $1.97 per thousand cubic feet in 2Q16.

CHK’s average realized price for natural gas liquids fell from $13.02 per barrel in 2Q15 to $12.88 per barrel in 2Q16.

CHK’s hedge position

To protect its cash flows against lower commodity prices, Chesapeake Energy has hedged 74% of its projected 2016 natural gas production volumes, 71% of its projected 2016 oil production volumes, and 32% of its projected 2016 natural gas liquids production volumes.

In the next part of this series, we’ll look at the evolution of Chesapeake’s proved reserves.

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