A. Lee Graham Reporter Chesapeake Energy Corp. has reported accelerated production and a solid profit as the oil and natural gas company produced more crude oil than some analysts expected. The Oklahoma City-based company’s second-quarter profit totaled $457 million, or 66 cents per share, compared to $929 million, or $1.29 per share, in the same period last year. Helping boost last year’s profit was the sale of the company’s gas gathering and processing unit. Adjusting for those one-time items, the company reported a profit of 51 cents per share. In the company’s second-quarter financial report, released Thursday, it reported adjusted earnings before interest, taxes, depreciation and amortization of $1.4 billion, about 77 percent more year over year. Operating cash flow, defined as cash flow provided by operating activities before changes in assets and liabilities, reached $1.4 billion, an increase of 53 percent year over year. Commending the latest quarterly results CEO Doug Lawler, who succeeded Aubrey Hawkins as company chief earlier this year. “Chesapeake reported a strong quarter operationally and financially. I am very excited and energized by what I have seen during my first six weeks with the company,” Lawler said in a news release. “Chesapeake has an exceptionally broad and deep asset base, which offers tremendous opportunity for value creation,” Lawler said. Second quarter production grew 7 percent year over year to 4.1 billion cubic feet of natural gas equivalent per day as oil production rose 44 percent year over year to 116,000 barrels per day. Comprising the company’s average daily production was about 3.1 billion cubic feet of natural gas and about 168,000 barrels of liquids, consisting of about 116,000 barrels of oil and about 52,000 barrels of natural gas liquids. In second quarter 2013, average daily natural gas liquids production increased 5 percent year over year and decreased 4 percent from the prior quarter. The company attributed the quarter-to-quarter volume drop as primarily resulting from increased ethane rejection during the second quarter. Liquids comprised 25 percent total production during second quarter 2013, up from 21 percent in the same quarter last year. Steve Dixon, Chesapeake’s chief operating officer, said the company is raising its full-year 2013 oil production guidance by 1 million barrels to 38 – 40 million barrels, representing a growth rate of 22 percent to 28 percent year over year “due to good well performance, an accelerated pace of well completions in the Eagle Ford Shale and timing of asset sales,” Dixon said. During second quarter 2013, the company operated an average of 76 rigs, seven fewer rigs compared to the 2013 first quarter. The company invested about $1.6 billion in drilling and completion costs. During the second half of 2013, Chesapeake said it plans to operate about 64 rigs compared to an average of 81 rigs during the first half of the year. The company also plans to complete about 20 percent fewer wells in the second half of 2013 compared to the first half of the year. Based on those planned activity levels, the company is reducing its 2013 full-year guidance for drilling and completion costs from a range of $5.75 billion – $6.25 billion to $5.7 billion – $6.0 billion. Meanwhile, the company reports making “significant progress” in selling non-core assets to lessen debt and bolster cash flow. In the first half of this year, the company received proceeds totaling about $2.4 billion from asset sales. During the 2013 third quarter to date, the company has completed selling additional assets in the Haynesville Shale and Eagle Ford Shale to subsidiaries of EXCO Resources Inc. for about $1 billion. Chesapeake Energy Corp., whose interests include the Barnett Shale in North Texas, develops unconventional natural gas and oil fields nationwide. More information is available at www.chk.com. lgraham@bizpress.net