Chesapeake Energy reported a loss for the second quarter, contrasting with a profit from the previous year, as production declined and natural gas prices remained low.
The total average realized price, including hedges, fell by 6% due to weaker demand caused by an unexpectedly warm winter and increased storage levels. In response to these declining prices, Chesapeake and competitors like EQT and Coterra Energy reduced their production earlier this year.
Chesapeake’s production dropped 24.9% to 2.75 billion cubic feet per day (bcf/d) during the April-June quarter. The U.S. Energy Information Administration forecasts a decline in domestic natural gas production for the rest of 2024, marking the first decrease since 2020.
Chesapeake has lowered its 2024 capital expenditure forecast by about 4% to between $1.2 to $1.3 billion and expects third-quarter production to be between 2.57 bcf/d and 2.67 bcf/d. The company reported a net loss of $227 million for the quarter, compared to a profit of $391 million a year earlier, with an adjusted net income of 1 cent per share, slightly above analysts’ break-even estimates.