Chesapeake Energy makes big cuts to 2015 capex, rig count
- Chesapeake Energy (NYSE:CHK) -4.4% premarket after reporting weaker than expected Q4 earnings and saying it will cut its 2015 spending and rig count in response to lower crude oil prices.
- CHK says it plans total capital spending of $4B-$4.5B in 2015, 37% lower at the midpoint than the $6.7B spent in 2014, and will operate only 35-45 rigs this year, the lowest number since 2004 and down from an average of 64 rigs in 2014.
- Even with the cutbacks, CHK forecasts 2015 oil and gas production to grow 3%-5% to 645K-655K boe/day.
- In Q4, CHK's average production increased 12% Y/Y to 729K boe/day, while revenue rose 11% to $5.05B and driven by 47% revenue growth in its natural gas, oil and natural gas liquid segment; operating expenses fell 4.7% to $4.09B.
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