Chesapeake raised $1.3 billion last year from asset sales and has fired thousands of employees to cope with a burdened balance sheet. Still, the company’s debt load remained little changed in 2017 at about $10 billion, according to its fourth-quarter earnings statement.
Moving forward, the goal is to slash debt by as much as $3 billion, CEO Doug Lawler said on a conference call with analysts Thursday.
"The measurement of this great company will be what we deliver in the next five years," Lawler said. "We are committed to making material progress toward our goal of $2 billion to $3 billion in debt reduction in 2018."
Chesapeake shares jumped 22% to close at $3.20 in New York, the biggest gain since April 2016.
The Oklahoma City-based driller’s production is about 80 percent gas, but that could change as it focuses on selling gas assets to chip away at its debt load, said Nick Dell’Osso, the company’s chief financial officer, on the call. Nationwide, the company said it plans to trim its capital budget by 12% this year to $2.18 billion.
In Wyoming’s Powder River field, output from three recent Chesapeake wells averaged 90% crude. Another well in the region will come online next week, according to the company’s fourth-quarter earnings statement.
But the company isn’t shying away from it’s gas machine in the U.S. Northeast, the prolific Marcellus Shale field: Chesapeake plans to put 55 wells online there this year, up from 43 in 2017.
The Oklahoma City-based driller’s per-share profit was 4 cents higher than the average estimate from 26 analysts in a Bloomberg survey, adjusted for one-time items. Even so, Chesapeake’s production of natural gas and crude is forecast to remain flat this year, according to a statement released on Thursday.