Chesapeake Energy 2Q18: $2B Utica Deal Last Major Asset Sale

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Chesapeake Energy released its second quarter 2018 update yesterday, and hosted a conference call with investor/analysts. Some of the big talk revolved around Chessy’s recent announcement it is selling its Ohio Utica assets for $2 billion (see Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B). While that announcement last week caused Chesapeake’s stock price to pop up, yesterday’s announcement that the company lost $40 million in 2Q18 caused stock prices to go back down. CEO Doug Lawler put a good spin on the news, and indeed there is reason to be optimistic. The company is moving in the direction of profitability. Lawler said the $2B sale of Ohio Utica assets will be used to pare down the company’s $9+ billion debt. He also said the Utica sale is the last major asset the company will sell in its bid to reduce outstanding debt. So what will they do to further reduce the company’s high debt? Lawler said, “Going forward, organic production growth, exploration, strategic acquisitions and portfolio management” will get the job done. As we’ve previously noted, Chesapeake is in the midst of converting itself from primarily a gas-drilling company to primarily an oil-drilling company. Doug is betting the ranch on oil. Below is an overview of yesterday’s update, a copy of the full update, and some excerpts of interest from the conference call…

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