OKLAHOMA CITY (AP) — Aggressive cost-cutting helped Chesapeake Energy Corp. narrow its fourth-quarter loss to a mere fraction of the massive $2.2 billion loss a year ago, but investors were unimpressed as shares fell more than 6 percent in midday trading as commodity prices in the energy sector remain flat.
The Oaklahoma City-based oil and gas producer cut its loss to $343 million in the quarter. On a per-share basis, Chesapeake said it lost 84 cents. Earnings, adjusted for non-recurring costs, came to 7 cents per share, topping Wall Street expectations by a penny.
The company lost $3.36 per share in the fourth quarter last year, amid tumbling oil prices.
Chesapeake slashed its production costs by $336 million in 2016, a 28 percent improvement from a year earlier on a barrel of oil equivalent basis. The company said it saved another $264 million in gathering, processing and transportation expenses in 2016 compared to the prior year.
The cost-cutting hurt revenue, which fell again, to $2.02 billion in the quarter. Adjusted revenue was $678 million, which missed Street forecasts. Four analysts surveyed by Zacks Investment Research expected $1.06 billion. Chesapeake reported $2.65 billion in revenue in the fourth quarter last year.
Chesapeake has cut spending, sold assets and laid off workers since the decline in energy prices began more than two years ago. However, last week the company announced plans to increase its drilling budget and rig count in 2017, saying confidence is growing in the energy sector. The company plans to operate an average of 17 rigs in 2017, compared to an average of 10 rigs in 2016. In 2015, Chesapeake operated about 28 rigs.
The company’s shares have fallen 20 percent since the beginning of the year, but the stock has more than doubled in the last 12 months.
This story was generated in part by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CHK at https://www.zacks.com/ap/CHK