Chesapeake troubles deepen on glut-driven second-quarter loss

JOE CARROLL

OKLAHOMA CITY (Bloomberg) -- Chesapeake Energy Corp., the worst-performing stock on the Standard & Poors 500 this year, posted a second-quarter loss as it joined other North American oil and gas producers squeezed by a glut-driven commodity rout.

Chesapeake reported a net loss of $83 million, or 11 cents a share, compared with a profit of $191 million, or 22 cents, a year earlier, the Oklahoma City-based company said in a statement on Wednesday. The per-share result, adjusted for one-time items, matched the average estimate of 30 analysts’ estimates compiled by Bloomberg.

Chesapeake CEO Doug Lawler has been selling assets and dismantling complex financial commitments to free up cash for drilling and reduce debt. An effort to transform the second-largest U.S. natural gas supplier into an oil producer has been hobbled as falling gas prices crimped cash available to drill new wells.

U.S. gas traded at an average $2.737 per million British thermal unit during the second quarter, down 40% from $4.579 a year earlier. Chesapeake’s production was 83% gas during the January-to-March period, according to data compiled by Bloomberg.

Chesapeake has fallen 59% this year, compared to an average gain of 1.7% for the S&P 500 Index.