Chesapeake Asset Sale Lifts Profits, Shares Rise
(Reuters) - Chesapeake Energy Corp posted a jump in second-quarter profit on Monday after it sold its midstream subsidiary, and said it expects to announce the sale of key West Texas assets in the next 30 days.
The company said it signed a purchase of sale agreement with Enervest Ltd for properties in the Midland basin of the Permian in West Texas, but the price was not disclosed.
The company, the nation's second biggest producer of natural gas, has put 1.5 million acres in the Permian Basin up for sale in a bid to raise money for the cash-strapped company.
Chesapeake and its CEO, Aubrey McClendon, have been operating under a cloud following a series of Reuters investigations that have drawn the attention of state and federal regulators, including the U.S. Securities and Exchange Commission and the U.S. Department of Justice.
Two of the company's biggest investors now control four seats on the Chesapeake's nine member board of directors and McClendon was replaced by former ConocoPhillips director Archie Dunham in June.
Chesapeake struggled amid the steep downturn in U.S. natural gas prices during the second quarter, which has left the company with a cash shortfall of about $10 billion this year.
Profit in the quarter was $929 million, or $1.29 per share, up from $467 million, or 68 cents per share, in the same period a year ago.
Excluding the $584 million gain from sale of its Chesapeake Midstream Partners, a $490 million gain in the value of its energy derivative positions, and other one-time items, earnings per share were 6 cents, the company said.
Analysts had on average forecast earnings per share of 7 cents, according to Thomson Reuters I/B/E/S.
Revenues rose to $3.4 billion from $3.3 billion a year ago.
Chesapeake said it now expected its asset sales would be between $13 billion to $14 billion this year, the upper end of its previous target of $11.5 billion to $14 billion.
The company's shares, which were down 21 percent so far this year through Monday's close, were up 3.0 percent in extended trading at $18.24 per share.
(Reporting By Anna Driver in Houston and Matt Daily in New York; editing by Andre Grenon)
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