10-QPeriod: Q1 FY2018

EXPAND ENERGY Corp Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 2, 2018For Securities:EXEEXEELEXEEWEXEEZ

Summary

Chesapeake Energy Corporation (EXE) reported its first quarter 2018 financial results, demonstrating a significant improvement in profitability compared to the same period last year. Net income available to common stockholders more than tripled to $268 million from $75 million in Q1 2017, leading to a substantial increase in diluted earnings per share to $0.29 from $0.08. The company's operational performance showed strength with a 11% increase in adjusted production and a 13% rise in average sales price per barrel of oil equivalent (boe), contributing to higher revenues. Despite a decrease in total debt to $9.4 billion from $9.98 billion at the end of 2017, the company maintained a substantial net working capital deficit. Management highlighted strategic priorities focused on debt reduction and operational efficiency, which appear to be yielding positive results in terms of financial performance.

Financial Highlights

44 data points
Beta

Revenue

$2.52B

Net Income

$17.00M

0.7% Net Margin

EPS (Diluted)

$-0.01

Total Assets

$12.09B

Cash & Equivalents

$4.00M

Free Cash Flow

$588.00M

Financial Statements
Beta
Revenue$2.52B
Operating Expenses$2.48B
Operating Income$42.00M
Interest Expense$162.00M
Net Income$17.00M
EPS (Basic)$-0.01
EPS (Diluted)$-0.01
Shares Outstanding (Basic)907.00M
Shares Outstanding (Diluted)907.00M

Key Highlights

  • 1Net income available to common stockholders increased significantly to $268 million in Q1 2018, up from $75 million in Q1 2017, marking a substantial improvement in profitability.
  • 2Diluted earnings per share rose to $0.29 from $0.08 year-over-year, reflecting the stronger financial performance.
  • 3Adjusted production increased by 11% to 540 mboe/day, indicating improved operational output, while the average sales price per boe rose by 13% to $27.27.
  • 4Total debt was reduced to $9.4 billion as of March 31, 2018, down from $9.98 billion at December 31, 2017, aligning with the company's focus on deleveraging.
  • 5The company reported a net cash provided by operating activities of $656 million, a significant increase from $99 million in the prior year's quarter, demonstrating improved cash generation.
  • 6Divestitures played a key role in funding activities, with proceeds of $319 million from property divestitures contributing to cash flows.
  • 7The company completed a workforce reduction of approximately 13%, aiming for an annual cash cost reduction of $70 million.

Frequently Asked Questions

Chesapeake Energy Corp. showed a strong improvement in financial performance during the first quarter of 2018. Net income available to common stockholders more than tripled to $268 million from $75 million in the prior year's quarter. Diluted earnings per share also saw a substantial increase to $0.29 from $0.08.

The company successfully reduced its total debt principal amount to $9.4 billion as of March 31, 2018, down from $9.98 billion at the end of 2017. This reduction is in line with their strategic priority to deleverage.

Management expects to be able to fund its planned capital expenditures, debt service, and other commitments and obligations for the next 12 months, supported by its cash balance, forecasted operating cash flows, and availability under its revolving credit facility. However, they acknowledge uncertainty beyond the next 12 months and may explore capital markets or refinancing options if needed.

Revenue increased due to higher commodity prices for oil, natural gas, and NGLs sold, as well as increased sales volumes. The average sales price per barrel of oil equivalent (boe) rose by 13% to $27.27, and adjusted production increased by 11%.