Chesapeake fourth-quarter profit tops Street, expenses fall

Thu Feb 21, 2013 2:30pm EST
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By Anna Driver

(Reuters) - Chesapeake Energy Corp (CHK.N: Quote) reported fourth-quarter profit that topped Wall Street estimates on Thursday, helped by lower-than-expected expenses and more profitable oil production.

The earnings report came a day after Chesapeake said an internal investigation of the financial dealings of outgoing Chief Executive Aubrey McClendon found no "intentional" wrongdoing.

McClendon is stepping down on April 1 following a tumultuous year during which the company faced a liquidity crunch and a governance crisis. Now Chesapeake's board and big shareholders are trying to rein in spending, pay down debt and increase production of more profitable oil.

McClendon, who co-founded the company in 1989, was not quoted in the earnings release and did not participate in the company's conference call with analysts for the first time in 80 quarters.

Phil Weiss, an analyst with Argus Research, said expenses in a number of areas came in below his projections while cash flow was higher than he anticipated.

General and administrative expenses fell to $99 million in the quarter from $138 million a year earlier and drilling and completion costs declined about 30 percent from a year ago.

"Costs are moving in the right direction on both general and administrative and production expense," analysts at Tudor Pickering Holt & Co said in a note to clients.


Chesapeake Energy Corporation's 50 acre campus is seen in Oklahoma City, Oklahoma, on April 17, 2012. REUTERS/Steve Sisney