TotalEnergies is involved in Exploration & Production, Refining & Chemicals, Marketing & Services, Natural Gas Trading & Marketing, Crude Oil and Refined Products Trading & Marketing, Specialty Chemicals, and New Energies.
Project: Energía Costa Azul LNG Export Project Phase 1
Firm Commitment: 0.8 mtpa
Project: Driftwood LNG
Firm Commitment: 1 mtpa
Project: Driftwood LNG
Firm Commitment: 2.5 mtpa
Project: Santos GLNG Export Terminal
Firm Commitment: 1.5 mtpa
Project: Sabine Pass Train 5
Firm Commitment: 2 mtpa
Project: Energia Costa Azul LNG Phase 1
Firm Commitment: 1.25 mtpa
COST: 4.1 $B
VOLUMES: 135 M Bbls/d
VOLUMES: 2800 MW
COST: 260 $MM
COST: 165 $MM
VOLUMES: 143 MW
COST: 635 $MM
VOLUMES: 25 MBOE/d
COST: 7.45 $B
VOLUMES: 160 MBOE/d
PALM BEACH, Florida, March 24, 2020 /PRNewswire/ -- Oil and gas production has a long history in Indonesia, with Indonesia being an international pioneer in many areas, however, the industry has not seen significant new developments for a number of years, with many existing contractors having lost interest in further exploration in Indonesia due to regulatory instability and an uncertain investment climate, and few new players were entering the market according to a report in a PricewaterhouseCoopers (PWC), Indonesia, investment Guide but a new report from Orbis Research projects a rosy future for the Indonesian oil and gas market growth. The report stated: "Recovering prices, strong demand from the transportation industry and modern developments of oil and gas exploration and production activities are some of the factors driving Indonesia oil and gas market growth. Increasing exports and imports of oil and gas on the account of surged demand across the world are fueling the market growth. Global oil demand is estimated at 104 MMbbl/d in 2025 and natural gas continues to expand its share across major markets. Oil and gas companies will need to expand their production to meet emerging demand in the foreseeable future." Active energy companies in the markets this week include Indonesia Energy Corporation Limited (NYSE: INDO), TOTAL S.A. (NYSE: TOT), Noble Energy, Inc. (NASDAQ: NBL), Royal Dutch Shell plc (NYSE: RDS.A) (NYSE: RDS.B), Diamondback Energy, Inc. (NASDAQ: FANG).
The oil and gas industry is undergoing rapid transformations across the world. The innovation of new technologies has allowed unconventional drilling that enhances oil and gas production. New business models and services are rapidly evolving and assisting to reduce the cost of operations in upstream oil and gas, which in turn promoting the market growth. Sustained growth in the consumption of natural gas, petroleum, and petrochemical products is one of the major growth drivers for oil and gas companies in Indonesia. Companies operating in the industry can benefit from this opportunity through investing and participating in the oil and gas trade. The major Indonesia companies are undertaking various oil and gas pipeline projects and contracts to expand their production capacities and sustain their position in the oil and gas industry.
Indonesia Energy Corporation Limited
(NYSE American: INDO)
BREAKING NEWS: Indonesia Energy Obtains Key Permit to Initiate its 2020 Drilling Campaign -
Indonesia Energy Corporation (IEC), an oil and gas exploration and production company focused on Indonesia, today announced that the company's Technical Program and Drilling Budget has been approved by Pertamina, Indonesia's state-owned oil and natural gas corporation, which also granted IEC the permit to commence the bidding process to secure drilling contractors for its 2020 production drilling campaign at IEC's 63,000 acre Kruh Block.
In addition to seeking bids for drilling contractors, IEC has started the procurement and services engagement processes necessary to quickly commence its planned drilling operations for six new wells when its operatorship at Kruh Block renews in May 2020. This activity includes the procurement of drilling rig and other required services as well as all drilling goods. The procurement processes is expected to be be completed in the second quarter of 2020 so that drilling can commence in close proximity to the renewal of the Kruh operatorship.
In a recent press release, IEC noted that notwithstanding the recent drop in oil prices and global outbreak of the novel coronavirus, the company remains on track to move forward with its 2020 plans to drill and complete six new production wells on its 63,000 acre Kruh Block, located on the island of Sumatra, which is expected to significantly increase production and cash flow in 2020. As previously announced, it is expected that these 6 new wells will only cost approximately $1.5 million each and will bring IEC's average production cost to only US$21.34 per barrel (or possibly lower). This compares to the many companies in the United States that have announced the suspension of their drilling operations on their uneconomic assets.
Regarding IEC's 2020 exploration and appraisal plans for its 1,000,000 acre Citarum Block, the company announced that it has completed the technical evaluation for 2D Seismic survey planning and the Environmental Baseline Assessment and has also attained the government approval of a permit to commence the 2D seismic survey acquisition program. The new seismic data will allow IEC to make better predictions of the reservoir extent and select the best drilling location for delineating the gas discoveries.
Mr. Frank Ingriselli, IEC's President commented "As we announced just a few days ago, we remain on track with our production well drilling program at Kruh for 2020, and now we have taken further steps to start such operations. With the commencement of the well bidding process, we expect to have a drilling contractor secured in the near term and, with the permits issued by the government, we should be on-track to significantly increase production and cash flow this year. We are blessed with an asset that has such a low cost of production that notwithstanding the drop in world crude oil prices and the coronavirus outbreak, we believe we are still positioned to deliver on our development plans and drive shareholder value. The same is true for our 1,000,000-acre Citarum Block on the Java near Jakarta where natural gas prices are at a 400% premium to the prices in the United States."
Other recent developments in the energy industry include:
TOTAL S.A.(NYSE: TOT) the company Chairman & CEO addressed the Group's employees on March 19 to mobilize them in the face of the challenges ahead. He recalled the resilience that the Group's teams demonstrated during the 2015-16 oil crisis as well as the two pillars of the Group's strategy which are the organic pre-dividend breakeven of less than $25/b and the low gearing to face this high volatility.
In a context of oil prices on the order of $30 per barrel, he announced an action plan to be implemented immediately based on the following three axes: 1) Organic Capex cuts of more than $3 billion, ie. more than 20%, reducing 2020 net investments to less than $15 billion. These savings are mainly in the form of short-cycle flexible Capex, which can be arbitrated contractually over a very short time period; 2) $800 million of savings in 2020 on operating costs compared to 2019, instead of the $300 million previously announced; and 3) Suspension of the buyback program – the company announced a $2 billion buyback for 2020 in a 60 $/b environment; it bought back $550 million in the first two months.
Noble Energy, Inc. (NASDAQ: NBL) recently provided an operational update in response to the current global macroeconomic and commodity outlook: David L. Stover, Noble Energy's Chairman and CEO, commented, "In light of the recent commodity price downturn, we are sharply reducing capital expenditures. Deferring activity until commodity prices recover protects our investment returns, maintains free cash flow and strengthens the balance sheet. While this is a challenging environment, Noble Energy is well positioned to achieve attractive long-term returns for our shareholders. The impact of bringing a mega-project like Leviathan on production is evident today, as it provides greater certainty of cash flows, supports strong financial liquidity and improves our annual production decline profile."
The Company had $4.4 billion in financial liquidity at the end of February 2020. In addition, Noble Energy has no significant debt maturities before late 2024.
Royal Dutch Shell plc (NYSE: RDS.A) (NYSE: RDS.B) News: As the virus spreads across the world - seriously impacting people's health, our way of life and global markets - Shell is putting the safety and health of our people and customers first, along with the safe operations of all our businesses. At the same time, we are taking decisive action to reinforce the financial strength and resilience of our business so that we are well-positioned for the eventual economic recovery.
"As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business," said Ben van Beurden, Chief Executive Officer of Royal Dutch Shell. "The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past."
Diamondback Energy, Inc. (NASDAQ: FANG) recently provided an update to the operational press release it issued on March 9, 2020, as well as an update to the Company's 2020 and 2021 oil hedge positions. Following last week's release, Diamondback has reduced activity further, including a minimum one-month break for all completion crews operating for the Company. After that break, the Company expects to judiciously reactivate crews and run between three and five completion crews, down from nine crews, for the rest of 2020 dependent upon future commodity price, with the primary goal of protecting the Company's balance sheet and cash flow. Diamondback plans to reduce its operated drilling rig count to ten by early in the third quarter as contracts roll off over the next few months, and plans to run between six and ten rigs thereafter dependent upon future commodity price, representing more than a 50% reduction in rigs from earlier this year.
DISCLAIMER: FN Media Group LLC (FNM), which owns and operates FinancialNewsMedia.com and MarketNewsUpdates.com, is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with any company mentioned herein. FNM and its affiliated companies are a news dissemination solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNM's market updates, news alerts and corporate profiles are NOT a solicitation or recommendation to buy, sell or hold securities. The material in this release is intended to be strictly informational and is NEVER to be construed or interpreted as research material. All readers are strongly urged to perform research and due diligence on their own and consult a licensed financial professional before considering any level of investing in stocks. All material included herein is republished content and details which were previously disseminated by the companies mentioned in this release. FNM is not liable for any investment decisions by its readers or subscribers. Investors are cautioned that they may lose all or a portion of their investment when investing in stocks. For current services performed FNM has been compensated twenty five hundred dollars for news coverage of the current press releases issued by Indonesia Energy Corporation Limited by a non affiliated third party. FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
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SOURCE FinancialNewsMedia.com
HOUSTON, May 23, 2018 /PRNewswire/ -- Total S.A. (NYSE: TOT) ("Total"), Borealis AG ("Borealis") and NOVA Chemicals Corporation ("NOVA Chemicals") today announced they have closed a joint venture in petrochemicals on the U.S. Gulf Coast after receiving all required regulatory approvals.
The company named Bayport Polymers LLC ("Bay-Pol") is 50% owned by Total and 50% owned by Novealis Holdings LLC, a joint venture between Borealis and NOVA Chemicals. Diane Chamberlain is appointed President of the new entity. The Bay-Pol Joint venture includes:
"We're excited for the future of our new company. The partnership between Total, Borealis and NOVA Chemicals will create a major player in the U.S. polyethylene market," said Diane Chamberlain. "We have a great opportunity to take advantage of low-cost feedstocks in the United States and deliver quality products that respond to the growing global demand for plastics."
About Bayport Polymers LLC ("Bay-Pol")
Bay-Pol is a joint venture 50% owned by Total and 50% owned by Novealis Holdings LLC, a joint venture between Borealis and NOVA Chemicals. The JV is the translation of the growth ambitions of each of the partners. It combines Total's existing Bayport, Texas, polyethylene 400 kt/y facility with the Borealis proprietary Borstar® technology and NOVA Chemicals' deep customer and technical expertise in polyethylene to deliver a broad range of products to help meet the growing global demand for plastic products. It also includes the under-construction 1Mt/y ethane steam cracker in Port Arthur, Texas, and a new 625 kt/y Borstar® polyethylene unit at the Bayport site, subject to further approvals.
About Total
Total is a global integrated energy producer and provider, a leading international oil and gas company, a major player in low-carbon energies. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits. www.total.com
About NOVA Chemicals
NOVA Chemicals develops and manufactures chemicals and plastic resins that make everyday life safer, healthier and easier. Our employees work to ensure health, safety, security and environmental stewardship through our commitment to sustainability and Responsible Care®. NOVA Chemicals, headquartered in Calgary, Alberta, Canada, is wholly-owned, ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates. www.novachem.com
About Borealis
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has around 6,600 employees and operates in over 120 countries. Borealis generated EUR 7.5 billion in sales revenue and a net profit of EUR 1,095 million in 2017. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers around the world in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC). www.borealisgroup.com
NOVA Chemicals' logo is a registered trademark of NOVA Brands Ltd.; authorized use. Responsible Care® is a registered trademark of the Chemistry Industry Association of Canada. Borstar is a registered trademark of the Borealis Group.
Cautionary note
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TOTAL S.A. directly or indirectly owns investments are separate legal entities. TOTAL S.A. has no liability for their acts or omissions. In this document, the terms "Total" and "Total Group" are sometimes used for convenience where general references are made to TOTAL S.A. and/or its subsidiaries. Likewise, the words "we", "us" and "our" may also be used to refer to subsidiaries in general or to those who work for them.
This press release may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TOTAL S.A., Borealis AG and NOVA Chemicals Corporation nor any of their respective subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.
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SOURCE Total
BRUSSELS and MONTREAL, May 2, 2018 /PRNewswire/ -- The Polymers Business unit of Total S.A. (NYSE:TOT) and Polystyvert, a Montreal-based clean technology startup with an innovative method for polystyrene recycling, today announced the signing of an agreement to work together on the dissolution and purification of household post-consumer polystyrene.
The combination of Polystyvert's innovative technology and Total's know-how in industrial-scale dissolution and polymerization technologies should generate high-quality recyclates addressing a broad range of polystyrene market requirements.
Polystyvert has developed an innovative low-carbon-footprint method for recycling polystyrene that is based on a dissolution process. This process produces recyclates which can be used in a broader range of market applications than recyclates produced through mechanical recycling methods. Household post-consumer plastics such as polystyrene often contain contaminants that make mechanical recycling difficult or not practical.
"We are very pleased to collaborate with Polystyvert on this ambitious and exciting journey," said Jean Viallefont, VP Polymers Europe, Total Refining & Chemicals. "In 2017, Total performed three successful test runs with post-consumer recyclates incorporated in virgin polymer via dissolution and polymerization. Working with Polystyvert to tackle household post-consumer waste is the next logical step for Total."
''We are excited to join forces with Total on the recycling of polystyrene," stated Solenne Brouard, Founder and CEO, Polystyvert Inc. "Collaborating with Total on household waste will accelerate the industrial development of our technology for global markets and demonstrate its suitability to address any type of polystyrene stream."
About Total
Total is a global integrated energy producer and provider, a leading international oil and gas company and a major player in low-carbon energies. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits.
About Polystyvert
Founded in 2011, Polystyvert is a Montreal-based clean technology startup that has developed an innovative, low-carbon-footprint process to recycle polystyrene based on a dissolution technology. Effective on all types of polystyrene, Polystyvert's technology includes a purification process that removes all contaminants, with a decentralized model that drastically reduces transportation costs. The result is a high-purity recycled resource that can be reused for upcycled polystyrene products, opening the door to a larger market than actual mechanical recycling technologies.
Polystyvert's technology addresses a major global environmental issue, since large quantities of post-consumer or post-industrial polystyrene waste are buried in landfills every year, while more and more new polystyrene is produced. Polystyvert's technology offers a great opportunity to reduce the consumption of fossil fuels used in the production of new polystyrene and reduce GHG emissions.
Cautionary note
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TOTAL S.A. directly or indirectly owns investments are separate legal entities. TOTAL S.A. has no liability for their acts or omissions. In this document, the terms "Total" and "Total Group" are sometimes used for convenience where general references are made to TOTAL S.A. and/or its subsidiaries. Likewise, the words "we", "us" and "our" may also be used to refer to subsidiaries in general or to those who work for them.
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SOURCE Total
PARIS and VIENNA and CALGARY, Alberta, Feb. 19, 2018 /PRNewswire/ -- Total S.A. (NYSE:TOT) ("Total"), Borealis AG ("Borealis") and NOVA Chemicals Corporation ("NOVA Chemicals") today announced that affiliates of the three companies have signed definitive agreements to form a joint venture in petrochemicals on the U.S. Gulf Coast.
The joint venture – in which Total will own 50% and Novealis Holdings LLC, a joint venture between Borealis and NOVA Chemicals, will own the remaining 50% – will commence subject to customary closing conditions, including receipt of regulatory approvals.
The joint venture will include:
As announced in March 2017, the new $1.7 billion ethane steam cracker is being built alongside Total's Port Arthur refinery and Total/BASF existing steam cracker. The project, which is scheduled to start up in 2020, will create around 1,500 jobs during peak engineering and construction activity.
"This agreement is a key milestone for this integrated petrochemicals project. This joint venture is aligned with Total's strategy to strengthen our position by taking advantage of low-cost U.S. gas," said Bernard Pinatel, President, Refining & Chemicals, Total. "We look forward to working with Borealis and NOVA Chemicals to create world-class facilities and become a major player in the growing U.S. and global market for polyethylene."
"The JV with Total and NOVA Chemicals is a key project in advancing our global growth. Not only are we convinced of the excellent cost-economics of this integrated brownfield investment project, but we are also excited to bring our unique product grades based on our Borstar technology to the North American market," said Borealis CEO Mark Garrett.
"A key component of NOVA Chemicals' growth strategy is to expand beyond our traditionally Canadian footprint by extending our presence in the U.S. Gulf Coast," stated NOVA Chemicals CEO, Todd Karran. "Partnering with Total and Borealis will allow us to better serve our customers throughout the Americas by delivering a broader slate of products that help make everyday life healthier, easier and safer."
About Total
Total is a global integrated energy producer and provider, a leading international oil and gas company, a major player in low-carbon energies. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits. www.total.com
About NOVA Chemicals
NOVA Chemicals develops and manufactures chemicals and plastic resins that make everyday life safer, healthier and easier. Our employees work to ensure health, safety, security and environmental stewardship through our commitment to sustainability and Responsible Care®. NOVA Chemicals, headquartered in Calgary, Alberta, Canada, is wholly-owned, ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.
About Borealis
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has around 6,600 employees and operates in over 120 countries. Borealis generated EUR 7.5 billion in sales revenue and a net profit of EUR 1,095 million in 2017. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers around the world in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC). www.borealisgroup.com
NOVA Chemicals' logo is a registered trademark of NOVA Brands Ltd.; authorized use.
Responsible Care® is a registered trademark of the Chemistry Industry Association of Canada.
Borstar is a registered trademark of the Borealis Group.
Cautionary note
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TOTAL S.A. directly or indirectly owns investments are separate legal entities. TOTAL S.A. has no liability for their acts or omissions. In this document, the terms "Total" and "Total Group" are sometimes used for convenience where general references are made to TOTAL S.A. and/or its subsidiaries. Likewise, the words "we", "us" and "our" may also be used to refer to subsidiaries in general or to those who work for them.
This press release may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TOTAL S.A., Borealis AG and NOVA Chemicals Corporation nor any of their respective subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.
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SOURCE Total
HOUSTON, Sept. 6, 2017 /PRNewswire/ -- Total (NYSE: TOT) announces it has made a $250,000 donation to the American Red Cross to assist in the Hurricane Harvey Relief efforts in the Gulf Coast region.
"Our hearts go out to those affected by this unprecedented natural disaster. We remain committed to helping rebuild the communities where we do business. That's why we've partnered with the Red Cross. Our donation of $250,000 will provide assistance to those in our community who have been hardest hit by Harvey," announced Christophe Gerondeau, US Country Representative and CEO of Total Petrochemicals & Refining USA, Inc.
With operations all along the Texas Gulf Coast, Total is also supporting its employees who have been affected by the storm. The company is committed to ensuring their safety as well as that of the operations.
Total has 7,500 employees in the United States who work in more than 40 sites in 23 states. For more information, visit www.us.total.com
About Total
Total is a global integrated energy producer and provider, a leading international oil and gas company, and a major player in solar energy with SunPower and Total Solar. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits.
Cautionary note
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TOTAL S.A. directly or indirectly owns investments are separate legal entities. TOTAL S.A. has no liability for their acts or omissions. In this document, the terms "Total" and "Total Group" are sometimes used for convenience where general references are made to TOTAL S.A. and/or its subsidiaries. Likewise, the words "we", "us" and "our" may also be used to refer to subsidiaries in general or to those who work for them.
This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TOTAL S.A. nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.
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SOURCE Total
PARIS, March 27, 2017 /PRNewswire/ -- Total is entering a partnership with Borealis and Nova to form a joint venture with the aim of building an ethane steam cracker and a new Borstar® polyethylene unit on the US Gulf Coast. Total is expected to hold a 50% interest in the new joint venture.
More precisely, the joint venture will include:
The joint venture is expected to be established in late 2017* and the final investment decision on the Borstar® polyethylene plant will be taken simultaneously.
The $1.7 billion new cracker is scheduled to start up in 2020 and will create around 1,500 jobs during peak engineering and construction activity. The engineering, procurement and construction contract (EPC) of the ethane steam cracker has been awarded by Total to CB&I.
The new cracker will be built alongside Total's Port Arthur refinery and Total/BASF existing steam cracker. By leveraging synergies with its existing world-class integrated platform in Texas, Total optimized capital expenditure and will deliver one of the most competitive cracker projects in the US.
"After significant investments in US LNG and US shale gas in 2016, this almost two billion dollar investment signals our determination to strengthen our presence in the United States, where we have operated for 60 years and have more than 6,000 employees," explained Patrick Pouyanné, Chairman and CEO of Total. "We want to take advantage of the business-friendly environment to contribute to making American petrochemicals even greater. By joining forces with Borealis and Nova, we aim to create a major player in the US polyethylene market."
The abundance of available gas in the United States as a result of the shale revolution provides two competitive advantages for petrochemicals: access to low-cost energy to run the facilities and competitively priced ethane feedstock.
Total in the United States
Total is present in all oil and gas industry segments, with the exception of fuel retailing, in the United States. Its operations there date back to 1957 and employ more than 6,000 people. Its main activities are:
* Pending regulatory approvals.
About Total
Total is a global integrated energy producer and provider, a leading international oil and gas company, and a major player in solar energy with SunPower and Total Solar. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits. total.com
Cautionary note
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TOTAL S.A. directly or indirectly owns investments are separate legal entities. TOTAL S.A. has no liability for their acts or omissions. In this document, the terms "Total" and "Total Group" are sometimes used for convenience where general references are made to TOTAL S.A. and/or its subsidiaries. Likewise, the words "we", "us" and "our" may also be used to refer to subsidiaries in general or to those who work for them.
This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TOTAL S.A. nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.
TOTAL
2, place Jean Millier
La Défense 6
92400 Courbevoie, France
Tel.: + 33 (0) 1 47 44 46 99
Fax: + 33 (0) 1 47 44 68 21
TOTAL S.A.
Share capital: €6,133,930,082.50
Registered in Nanterre: RCS 542 051 180
SOURCE Total
OKLAHOMA CITY, Feb. 23, 2017 /PRNewswire/ -- Chesapeake Energy Corporation (NYSE: CHK) today reported financial and operational results for the 2016 full year and fourth quarter plus other recent developments. Highlights include:
Doug Lawler, Chesapeake's Chief Executive Officer, commented, "During 2016, we made significant progress in improving our capital efficiency, decreasing cash costs and future midstream commitments while improving our liquidity and leverage profile, which resulted in a much stronger foundation for Chesapeake going forward. In 2017, we are capitalizing on these improvements across our cost structure to increase shareholder returns from our high-quality, diversified oil and natural gas portfolio. Our increase in activity over 2016 levels positions Chesapeake to deliver increased profitability and long-term value for our shareholders."
2016 Full Year Results
For the 2016 full year, Chesapeake's revenues declined by 38% from the 2015 full year due to a decrease in the average realized commodity prices received for its oil and natural gas production, lower production volumes, increased unrealized hedging losses and a decrease in the volumes sold and prices received by the company's marketing affiliate on behalf of third-party producers. Average daily production for the 2016 full year of approximately 635,400 barrels of oil equivalent (boe) consisted of approximately 90,800 barrels (bbls) of oil, 2.867 billion cubic feet (bcf) of natural gas and 66,700 bbls of natural gas liquids (NGL). During 2016, Chesapeake divested properties with average daily production of approximately 73,500 boe.
Average production expenses during the 2016 full year were $3.05 per boe, while G&A expenses (including stock-based compensation) during the 2016 full year were $1.03 per boe. Combined production and G&A expenses (including stock-based compensation) during the 2016 full year were $4.08 per boe, a decrease of 21% from the 2015 full year. Gathering, processing and transportation expenses during the 2016 full year were $7.98 per boe, a decrease of 7% from the 2015 full year. A summary of the company's production and operating expense guidance for 2017 is provided in the Outlook dated February 23, 2017, beginning on page 21.
Chesapeake reported a net loss available to common stockholders of $4.881 billion, or $6.39 per share, while the company's ebitda for the 2016 full year was a loss of $3.142 billion. The primary drivers of the net loss were noncash impairments of the carrying value of Chesapeake's oil and natural gas properties totaling $2.520 billion, largely resulting from decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices used in the company's impairment calculations, Barnett Shale exit costs of approximately $645 million and unrealized hedging losses of $818 million as prices marginally recovered. Adjusting for these and other items that are typically excluded by securities analysts, the 2016 full year adjusted net loss available to common stockholders was $138 million, or $0.05 per common share, while the company's adjusted ebitda was $1.339 billion in the 2016 full year. Reconciliations of financial measures calculated in accordance with generally accepted accounting principles (GAAP) to non-GAAP measures are provided on pages 13 – 19 of this release.
2016 Fourth Quarter Results
For the 2016 fourth quarter, Chesapeake's revenues declined by 24% year over year due to a decrease in the average realized commodity prices for its oil production, lower production volumes and increased unrealized hedging losses. Average daily production for the 2016 fourth quarter of approximately 574,500 barrels of oil equivalent (boe) consisted of approximately 90,400 bbls of oil, 2.562 bcf of natural gas and 57,100 bbls of NGL.
Average production expenses during the 2016 fourth quarter were $2.98 per boe, while G&A expenses (including stock-based compensation) during the 2016 fourth quarter were $1.28 per boe. Combined production and G&A expenses (including stock-based compensation) during the 2016 fourth quarter were $4.26 per boe, a decrease of 8% year over year. Gathering, processing and transportation expenses during the 2016 fourth quarter were $7.92 per boe, a decrease of 30% year over year, primarily due to minimum volume commitment shortfall payments accrued in the 2015 fourth quarter for our Barnett Shale operating area.
Chesapeake reported a net loss available to common stockholders of $741 million, or $0.84 per share, while the company's ebitda for the 2016 fourth quarter was a loss of $198 million. The primary drivers of the net loss were $395 million in unrealized losses on the company's oil and natural gas commodity derivatives and the loss on exchange of preferred stock of $428 million which represents the fair value of the additional shares of common stock issued in the exchange over the shares that would have been issuable pursuant to the original conversion terms. Adjusting for these and other items that are typically excluded by securities analysts, the 2016 fourth quarter adjusted net income available to common stockholders was $93 million, or $0.07 per common share, while the company's adjusted ebitda was $385 million in the 2016 fourth quarter. Reconciliations of financial measures calculated in accordance with GAAP to non-GAAP measures are provided on pages 13 – 19 of this release.
Capital Spending Overview
Chesapeake's total capital investments were approximately $1.7 billion during the 2016 full year, compared to approximately $3.6 billion in the 2015 full year. A summary of the company's 2016 and 2015 capital expenditures as well as the current 2017 guidance is provided in the table below.
2015 |
2016 |
2017 | |||
Operated activity comparison |
Q4 |
FY |
Q4 |
FY |
Outlook |
Average rig count |
14 |
28 |
12 |
10 |
16 - 18 |
Gross wells spud |
66 |
499 |
60 |
213 |
380 - 440 |
Gross wells completed |
85 |
547 |
82 |
365 |
420 - 485 |
Gross wells connected |
100 |
650 |
110 |
428 |
415 - 480 |
Type of cost ($ in millions) |
|||||
Drilling and completion costs |
$405 |
$2,959 |
$365 |
$1,316 |
|
Exploration costs, leasehold and additions to other PP&E |
55 |
231 |
38 |
130 |
|
Subtotal capital expenditures |
$460 |
$3,190 |
$403 |
$1,446 |
$1,700 - $2,300 |
Capitalized interest |
88 |
424 |
60 |
251 |
200 |
Total capital expenditures |
$548 |
$3,614 |
$463 |
$1,697 |
$1,900 - $2,500 |
Balance Sheet and Liquidity
As of December 31, 2016, Chesapeake's debt principal balance was approximately $10.0 billion, compared to $9.7 billion as of December 31, 2015, with approximately $882 million cash on hand. Subsequent to December 31, 2016, Chesapeake reduced its debt principal balance by approximately $901 million through the following actions:
Following the 2017 reductions in the principal balance of the company's outstanding debt, Chesapeake has approximately $9.1 billion in outstanding debt, with no outstanding borrowings on its revolving credit facility. Since December 31, 2015, Chesapeake has reduced the principal amount of debt due or that could be put to the company in 2017 and 2018 by approximately $2.7 billion, or 97%, from $2.770 billion to $77 million.
Also in January 2017, the company completed private exchanges of an aggregate of approximately 10 million shares of its common stock for (i) 150,948 shares of 5.00% Cumulative Convertible Preferred Stock (Series 2005B), (ii) 72,600 shares of 5.75% Cumulative Convertible Preferred Stock and (iii) 12,500 shares of 5.75% Cumulative Convertible Preferred Stock (Series A), with an aggregate liquidation value of approximately $100 million. On February 15, 2017, Chesapeake reinstated the payment of dividends on each series of its outstanding convertible preferred stock and paid our dividends in arrears.
Following the debt principal reductions, reinstatement of preferred dividends inclusive of payment of dividends in arrears and reductions in midstream obligations detailed below, Chesapeake expects to end February with approximately $300 million in cash on hand.
Asset Acquisitions and Divestitures Update
In the 2016 third quarter, the company entered into an agreement to convey its interests in the Barnett Shale operating area located in north central Texas to Total S.A. (NYSE: TOT) and simultaneously terminate a portion of future gas gathering and transportation commitments associated with this asset. Chesapeake received approximately $218 million in proceeds for these assets, which closed on October 31, 2016.
Also in the 2016 third quarter, the company sold the majority of its upstream and midstream assets in the Devonian Shale located in West Virginia, Kentucky, and Virginia. In connection with this divestiture, the company repurchased one of its two remaining volumetric production payment (VPP) transactions, resulting in nominal net proceeds. Chesapeake retained the deeper drilling rights in the area after this disposition, which closed on December 21, 2016.
In the 2017 first quarter, Chesapeake closed on two separate sales transactions of acreage and producing properties in its Haynesville Shale operating area in northern Louisiana for gross proceeds of approximately $915 million. Included in the sale were approximately 119,500 net acres and approximately 576 wells producing 80 million cubic feet of gas (mmcf) per day. Chesapeake continues to focus on select asset divestitures and is planning to sell additional noncore and non-operated properties in 2017.
Midstream Update
In the 2016 fourth quarter, Chesapeake signed a definitive contract to restructure its natural gas gathering and service agreement in its Powder River Basin operating area with Williams Partners L.P. and Crestwood Equity Partners L.P. The restructured services replaced the current cost-of-service arrangement and improved economics that support increased development across an expanded area of dedication in the region and became effective January 1, 2017, for a 20-year term.
Chesapeake continues to work to reduce and optimize its gathering, processing and transportation commitments across all of its operating areas. In February 2017, the company successfully reduced crude transportation commitments related to the Seaway Pipeline by assigning these commitments to a separate third party, effective April 1, 2017. These commitments totaled approximately $450 million and Chesapeake paid approximately $290 million to assign the contract. As a result, the company expects its marketing margin to improve significantly in 2018 over 2017 expected levels and return to profitability after 2018. In addition, the company utilized $100 million of the proceeds from the divestiture of its assets in the Barnett Shale to buy down approximately $110 million of its related natural gas transportation obligations. This new agreement is expected to be effective March 1, 2017.
Operations Update
Chesapeake's average daily production for the 2016 fourth quarter was approximately 574,500 boe and is further detailed in the table below. For the 2017 first quarter, the company expects its average daily production to range between 515,000 and 535,000 boe, of which average daily oil production is expected to range between 80,000 and 85,000 barrels per day, which is consistent with prior guidance. Chesapeake's projected production volumes and capital expenditure program are subject to capital allocation decisions throughout the year and can be adjusted based on prevailing market conditions.
2016 |
2016 |
2015 | |
Operating area net production (mboe/day) |
Q4 |
Q3 |
Q4 |
Eagle Ford |
104 |
101 |
97 |
Haynesville |
135 |
139 |
102 |
Marcellus |
134 |
134 |
130 |
Utica |
108 |
127 |
140 |
Mid-Continent |
53 |
55 |
94 |
Powder River Basin |
12 |
14 |
20 |
Barnett |
19 |
59 |
70 |
Other |
10 |
9 |
8 |
Total production |
575 |
638 |
661 |
Chesapeake is currently utilizing 17 drilling rigs across its operating areas, six of which are located in the Eagle Ford Shale, four in the Mid-Continent area, three in the Haynesville Shale, two in the Powder River Basin and two in Northeast Appalachia. Chesapeake plans to utilize an average of 17 rigs throughout the year and intends to spud and place in production approximately 400 and 450 gross operated wells, respectively, in 2017.
Key Financial and Operational Results
The table below summarizes Chesapeake's key financial and operational results during the 2016 fourth quarter and full year as compared to results in prior periods.
Three Months Ended |
Full Year Ended | |||||||||||
12/31/16 |
12/31/15 |
12/31/16 |
12/31/15 | |||||||||
Oil equivalent production (in mmboe) |
53 |
61 |
233 |
248 |
||||||||
Oil production (in mmbbls) |
8 |
9 |
33 |
42 |
||||||||
Average realized oil price ($/bbl)(a) |
47.37 |
64.04 |
43.58 |
66.91 |
||||||||
Natural gas production (in bcf) |
236 |
268 |
1,049 |
1,070 |
||||||||
Average realized natural gas price ($/mcf)(a) |
2.41 |
2.35 |
2.20 |
2.72 |
||||||||
NGL production (in mmbbls) |
5 |
7 |
24 |
28 |
||||||||
Average realized NGL price ($/bbl)(a) |
20.90 |
14.07 |
14.43 |
14.06 |
||||||||
Production expenses ($/boe) |
(2.98) |
(3.62) |
(3.05) |
(4.22) |
||||||||
Gathering, processing and transportation expenses ($/boe) |
(7.92) |
(11.34) |
(7.98) |
(8.55) |
||||||||
Oil - ($/bbl) |
(3.87) |
(3.53) |
(3.61) |
(3.38) |
||||||||
Natural Gas - ($/mcf) |
(1.46) |
(2.26) |
(1.47) |
(1.66) |
||||||||
NGL - ($/bbl) |
(8.05) |
(7.47) |
(7.83) |
(7.37) |
||||||||
Production taxes ($/boe) |
(0.38) |
(0.19) |
(0.32) |
(0.40) |
||||||||
General and administrative expenses ($/boe)(b) |
(1.11) |
(0.84) |
(0.87) |
(0.77) |
||||||||
Stock-based compensation ($/boe) |
(0.17) |
(0.18) |
(0.16) |
(0.18) |
||||||||
DD&A of oil and natural gas properties ($/boe) |
(4.05) |
(5.37) |
(4.31) |
(8.47) |
||||||||
DD&A of other assets ($/boe) |
(0.40) |
(0.50) |
(0.45) |
(0.53) |
||||||||
Interest expenses ($/boe)(a) |
(1.61) |
(1.70) |
(1.18) |
(1.30) |
||||||||
Marketing, gathering and compression net margin ($ in millions)(c) |
(25) |
2 |
(194) |
243 |
||||||||
Operating cash flow ($ in millions)(d) |
(120) |
386 |
528 |
2,268 |
||||||||
Operating cash flow ($/boe) |
(2.27) |
6.35 |
2.27 |
9.15 |
||||||||
Adjusted ebitda ($ in millions)(e) |
385 |
298 |
1,339 |
2,385 |
||||||||
Adjusted ebitda ($/boe) |
7.28 |
4.90 |
5.76 |
9.62 |
||||||||
Net loss available to common stockholders ($ in millions) |
(741) |
(2,228) |
(4,881) |
(14,856) |
||||||||
Loss per share – diluted ($) |
(0.84) |
(3.36) |
(6.39) |
(22.43) |
||||||||
Adjusted net income (loss) available to common stockholders ($ in millions)(f) |
93 |
(168) |
(138) |
(329) |
||||||||
Adjusted income (loss) per share ($)(g) |
0.07 |
(0.19) |
(0.05) |
(0.24) |
(a) |
Includes the effects of realized gains (losses) from hedging, but excludes the effects of unrealized gains (losses) from hedging. |
(b) |
Excludes expenses associated with stock-based compensation and restructuring and other termination costs. |
(c) |
Includes revenue, operating expenses and unrealized gains (losses) on supply contract derivatives, but excludes depreciation and amortization of other assets. For the three months ended December 31, 2016 and December 31, 2015, unrealized gains (losses) were zero and $5 million, respectively. For the year ended December 31, 2016 and December 31, 2015, unrealized gains (losses) were ($297 million) and $296 million, respectively. |
(d) |
Defined as cash flow provided by operating activities before changes in assets and liabilities. |
(e) |
Defined as net income before interest expense, income taxes and depreciation, depletion and amortization expense, as adjusted to remove the effects of certain items detailed on page 19. |
(f) |
Defined as net income available to common stockholders, as adjusted to remove the effects of certain items detailed on pages 13 - 16. |
(g) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
2016 Fourth Quarter and Year-End Financial and Operational Results Conference Call Information
A conference call to discuss this release has been scheduled on Thursday, February 23, 2017 at 9:00 am EDT. The telephone number to access the conference call is 719-325-2355 or toll-free 888-417-8531. The passcode for the call is 2585187. The number to access the conference call replay is 719-457-0820 or toll-free 888-203-1112 and the passcode for the replay is 2585187. The conference call will be webcast and can be found at www.chk.com in the "Investors" section of the company's website. The webcast of the conference will be available on the website for one year.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. The company also owns oil and natural gas marketing and natural gas gathering and compression businesses.
This news release and the accompanying Outlook include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements that give our current expectations or forecasts of future events, production and well connection forecasts, estimates of operating costs, anticipated capital and operational efficiencies, planned development drilling and expected drilling cost reductions, general and administrative expenses, capital expenditures, the timing of anticipated noncore asset sales and proceeds to be received therefrom, projected cash flow and liquidity, our ability to enhance our cash flow and financial flexibility, plans and objectives for future operations (including our ability to optimize base production and execute gas gathering agreements), the ability of our employees, portfolio strength and operational leadership to create long-term value, and the assumptions on which such statements are based. Although we believe the expectations and forecasts reflected in the forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties.
Factors that could cause actual results to differ materially from expected results include those described under "Risk Factors" in Item 1A of our annual report on Form 10-K and any updates to those factors set forth in Chesapeake's subsequent quarterly reports on Form 10-Q or current reports on Form 8-K (available at http://www.chk.com/investors/sec-filings). These risk factors include the volatility of oil, natural gas and NGL prices; the limitations our level of indebtedness may have on our financial flexibility; our inability to access the capital markets on favorable terms; the availability of cash flows from operations and other funds to finance reserve replacement costs or satisfy our debt obligations; downgrade in our credit rating requiring us to post more collateral under certain commercial arrangements; write-downs of our oil and natural gas asset carrying values due to low commodity prices; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities of oil, natural gas and NGL reserves and projecting future rates of production and the amount and timing of development expenditures; our ability to generate profits or achieve targeted results in drilling and well operations; leasehold terms expiring before production can be established; commodity derivative activities resulting in lower prices realized on oil, natural gas and NGL sales; the need to secure derivative liabilities and the inability of counterparties to satisfy their obligations; adverse developments or losses from pending or future litigation and regulatory proceedings, including royalty claims; charges incurred in response to market conditions and in connection with our ongoing actions to reduce financial leverage and complexity; drilling and operating risks and resulting liabilities; effects of environmental protection laws and regulation on our business; legislative and regulatory initiatives further regulating hydraulic fracturing; our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used; impacts of potential legislative and regulatory actions addressing climate change; federal and state tax proposals affecting our industry; potential OTC derivatives regulation limiting our ability to hedge against commodity price fluctuations; competition in the oil and gas exploration and production industry; a deterioration in general economic, business or industry conditions; negative public perceptions of our industry; limited control over properties we do not operate; pipeline and gathering system capacity constraints and transportation interruptions; terrorist activities and cyber-attacks adversely impacting our operations; potential challenges by Seventy Seven Energy Inc.'s (SSE) former creditors in connection with SSE's recently completed bankruptcy under Chapter 11 of the U.S. Bankruptcy Code; an interruption in operations at our headquarters due to a catastrophic event; the continuation of suspended dividend payments on our common stock; certain anti-takeover provisions that affect shareholder rights; and our inability to increase or maintain our liquidity through debt repurchases, capital exchanges, asset sales, joint ventures, farmouts or other means.
In addition, disclosures concerning the estimated contribution of derivative contracts to our future results of operations are based upon market information as of a specific date. These market prices are subject to significant volatility. Our production forecasts are also dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Expected asset sales may not be completed in the time frame anticipated or at all. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release, and we undertake no obligation to update any of the information provided in this release or the accompanying Outlook, except as required by applicable law. In addition, this news release contains time-sensitive information that reflects management's best judgment only as of the date of this news release.
INVESTOR CONTACT: |
MEDIA CONTACT: |
Brad Sylvester, CFA |
Gordon Pennoyer |
CHESAPEAKE ENERGY CORPORATION | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended |
Years Ended | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
REVENUES: |
||||||||||||||||
Oil, natural gas and NGL |
$ |
678 |
$ |
1,269 |
$ |
3,288 |
$ |
5,391 |
||||||||
Marketing, gathering and compression |
1,343 |
1,380 |
4,584 |
7,373 |
||||||||||||
Total Revenues |
2,021 |
2,649 |
7,872 |
12,764 |
||||||||||||
OPERATING EXPENSES: |
||||||||||||||||
Oil, natural gas and NGL production |
158 |
220 |
710 |
1,046 |
||||||||||||
Oil, natural gas and NGL gathering, processing and transportation |
419 |
690 |
1,855 |
2,119 |
||||||||||||
Production taxes |
20 |
12 |
74 |
99 |
||||||||||||
Marketing, gathering and compression |
1,368 |
1,378 |
4,778 |
7,130 |
||||||||||||
General and administrative |
68 |
62 |
240 |
235 |
||||||||||||
Restructuring and other termination costs |
3 |
(3) |
6 |
36 |
||||||||||||
Provision for legal contingencies |
11 |
(6) |
123 |
353 |
||||||||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
214 |
326 |
1,002 |
2,099 |
||||||||||||
Depreciation and amortization of other assets |
21 |
30 |
104 |
130 |
||||||||||||
Impairment of oil and natural gas properties |
— |
2,831 |
2,520 |
18,238 |
||||||||||||
Impairments of fixed assets and other |
43 |
27 |
838 |
194 |
||||||||||||
Net (gains) losses on sales of fixed assets |
(7) |
1 |
(12) |
4 |
||||||||||||
Total Operating Expenses |
2,318 |
5,568 |
12,238 |
31,683 |
||||||||||||
LOSS FROM OPERATIONS |
(297) |
(2,919) |
(4,366) |
(18,919) |
||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||
Interest expense |
(99) |
(107) |
(296) |
(317) |
||||||||||||
Losses on investments |
(5) |
(39) |
(8) |
(96) |
||||||||||||
Impairments of investments |
(119) |
(53) |
(119) |
(53) |
||||||||||||
Losses on sales of investments |
— |
— |
(10) |
— |
||||||||||||
Gains (losses) on purchases or exchanges of debt |
(19) |
279 |
236 |
279 |
||||||||||||
Other income |
7 |
5 |
19 |
8 |
||||||||||||
Total Other Income (Expense) |
(235) |
85 |
(178) |
(179) |
||||||||||||
LOSS BEFORE INCOME TAXES |
(532) |
(2,834) |
(4,544) |
(19,098) |
||||||||||||
INCOME TAX BENEFIT: |
||||||||||||||||
Current income taxes |
(19) |
(30) |
(19) |
(36) |
||||||||||||
Deferred income taxes |
(171) |
(619) |
(171) |
(4,427) |
||||||||||||
Total Income Tax Benefit |
(190) |
(649) |
(190) |
(4,463) |
||||||||||||
NET LOSS |
(342) |
(2,185) |
(4,354) |
(14,635) |
||||||||||||
Net income attributable to noncontrolling interests |
(1) |
— |
(2) |
(50) |
||||||||||||
NET LOSS ATTRIBUTABLE TO CHESAPEAKE |
(343) |
(2,185) |
(4,356) |
(14,685) |
||||||||||||
Preferred stock dividends |
30 |
(43) |
(97) |
(171) |
||||||||||||
Loss on exchange of preferred stock |
(428) |
— |
(428) |
— |
||||||||||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS |
$ |
(741) |
$ |
(2,228) |
$ |
(4,881) |
$ |
(14,856) |
||||||||
LOSS PER COMMON SHARE: |
||||||||||||||||
Basic |
$ |
(0.84) |
$ |
(3.36) |
$ |
(6.39) |
$ |
(22.43) |
||||||||
Diluted |
$ |
(0.84) |
$ |
(3.36) |
$ |
(6.39) |
$ |
(22.43) |
||||||||
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): |
||||||||||||||||
Basic |
887 |
663 |
764 |
662 |
||||||||||||
Diluted |
887 |
663 |
764 |
662 |
CHESAPEAKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
December 31, |
December 31, | |||||||
Cash and cash equivalents |
$ |
882 |
$ |
825 |
||||
Other current assets |
1,260 |
1,655 |
||||||
Total Current Assets |
2,142 |
2,480 |
||||||
Property and equipment, (net) |
10,654 |
14,298 |
||||||
Other assets |
277 |
536 |
||||||
Total Assets |
$ |
13,073 |
$ |
17,314 |
||||
Current liabilities |
$ |
3,648 |
$ |
3,685 |
||||
Long-term debt, net |
9,938 |
10,311 |
||||||
Other long-term liabilities |
645 |
921 |
||||||
Total Liabilities |
14,231 |
14,917 |
||||||
Preferred stock |
1,771 |
3,062 |
||||||
Noncontrolling interests |
257 |
259 |
||||||
Common stock and other stockholders' equity |
(3,186) |
(924) |
||||||
Total Equity (Deficit) |
(1,158) |
2,397 |
||||||
Total Liabilities and Equity |
$ |
13,073 |
$ |
17,314 |
||||
Common shares outstanding (in millions) |
895 |
663 |
||||||
Principal amount of debt outstanding |
$ |
9,989 |
$ |
9,706 |
CHESAPEAKE ENERGY CORPORATION ROLL-FORWARD OF PROVED RESERVES YEAR ENDED DECEMBER 31, 2016 (unaudited) | ||||
Mmboe(a) | ||||
Beginning balance, December 31, 2015 |
1,504 | |||
Production |
(233) | |||
Acquisitions |
55 | |||
Divestitures |
(241) | |||
Revisions - changes to previous estimates |
113 | |||
Revisions - price |
(70) | |||
Extensions and discoveries |
580 | |||
Ending balance, December 31, 2016 |
1,708 | |||
Proved reserves growth rate before acquisitions and divestitures |
26% | |||
Proved reserves growth rate after acquisitions and divestitures |
14% | |||
Proved developed reserves |
1,189 | |||
Proved developed reserves percentage |
70% | |||
PV-10 ($ in millions)(a) |
$ |
4,405 | ||
(a) |
Reserve volumes and PV-10 value estimated using SEC reserve recognition standards and pricing assumptions based on the trailing 12-month average first-day-of-the-month prices as of December 31, 2016 of $42.75 per bbl of oil and $2.49 per mcf of natural gas, before basis differential adjustments. |
CHESAPEAKE ENERGY CORPORATION RECONCILIATION OF PV-10 ($ in millions) (unaudited) | |||||||
December 31, |
December 31, | ||||||
Standardized measure of discounted future net cash flows |
$ |
4,379 |
$ |
4,693 |
|||
Discounted future cash flows for income taxes |
26 |
34 |
|||||
Discounted future net cash flows before income taxes (PV-10) |
$ |
4,405 |
$ |
4,727 |
PV-10 is discounted (at 10%) future net cash flows before income taxes. The standardized measure of discounted future net cash flows includes the effects of estimated future income tax expenses and is calculated in accordance with Accounting Standards Codification Topic 932. Management uses PV-10 as one measure of the value of the company's current proved reserves and to compare relative values among peer companies without regard to income taxes. We also understand that securities analysts and rating agencies use this measure in similar ways. While PV-10 is based on prices, costs and discount factors which are consistent from company to company, the standardized measure is dependent on the unique tax situation of each individual company.
The company's PV-10 and standardized measure were calculated using the following prices, before basis differential adjustments: $42.75 per bbl of oil and $2.49 per mcf of natural gas as of December 31, 2016, and $50.28 per bbl of oil and $2.58 per mcf of natural gas as of December 31, 2015.
CHESAPEAKE ENERGY CORPORATION | ||||||||||||||||
SUPPLEMENTAL DATA – OIL, NATURAL GAS AND NGL PRODUCTION, SALES AND INTEREST EXPENSE | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended |
Years Ended | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
Net Production: |
||||||||||||||||
Oil (mmbbl) |
8 |
9 |
33 |
42 |
||||||||||||
Natural gas (bcf) |
236 |
268 |
1,049 |
1,070 |
||||||||||||
NGL (mmbbl) |
5 |
7 |
24 |
28 |
||||||||||||
Oil equivalent (mmboe) |
53 |
61 |
233 |
248 |
||||||||||||
Oil, natural gas and NGL Sales ($ in millions): |
||||||||||||||||
Oil sales |
$ |
399 |
$ |
355 |
$ |
1,351 |
$ |
1,904 |
||||||||
Oil derivatives – realized gains (losses)(a) |
(5) |
238 |
97 |
880 |
||||||||||||
Oil derivatives – unrealized gains (losses)(a) |
(101) |
(92) |
(318) |
(536) |
||||||||||||
Total Oil Sales |
293 |
501 |
1,130 |
2,248 |
||||||||||||
Natural gas sales |
610 |
533 |
2,155 |
2,470 |
||||||||||||
Natural gas derivatives – realized gains (losses)(a) |
(41) |
96 |
151 |
437 |
||||||||||||
Natural gas derivatives – unrealized gains (losses)(a) |
(296) |
41 |
(500) |
(157) |
||||||||||||
Total Natural Gas Sales |
273 |
670 |
1,806 |
2,750 |
||||||||||||
NGL sales |
113 |
98 |
360 |
393 |
||||||||||||
NGL derivatives – realized gains (losses)(a) |
(3) |
— |
(8) |
— |
||||||||||||
NGL derivatives – unrealized gains (losses)(a) |
2 |
— |
— |
— |
||||||||||||
Total NGL Sales |
112 |
98 |
352 |
393 |
||||||||||||
Total Oil, Natural Gas and NGL Sales |
$ |
678 |
$ |
1,269 |
$ |
3,288 |
$ |
5,391 |
||||||||
Average Sales Price – |
||||||||||||||||
excluding gains (losses) on derivatives: |
||||||||||||||||
Oil ($ per bbl) |
$ |
47.95 |
$ |
38.33 |
$ |
40.65 |
$ |
45.77 |
||||||||
Natural gas ($ per mcf) |
$ |
2.59 |
$ |
1.99 |
$ |
2.05 |
$ |
2.31 |
||||||||
NGL ($ per bbl) |
$ |
21.54 |
$ |
14.07 |
$ |
14.76 |
$ |
14.06 |
||||||||
Oil equivalent ($ per boe) |
$ |
21.24 |
$ |
16.20 |
$ |
16.63 |
$ |
19.23 |
||||||||
Average Sales Price – |
||||||||||||||||
including realized gains (losses) on derivatives: |
||||||||||||||||
Oil ($ per bbl) |
$ |
47.37 |
$ |
64.04 |
$ |
43.58 |
$ |
66.91 |
||||||||
Natural gas ($ per mcf) |
$ |
2.41 |
$ |
2.35 |
$ |
2.20 |
$ |
2.72 |
||||||||
NGL ($ per bbl) |
$ |
20.90 |
$ |
14.07 |
$ |
14.43 |
$ |
14.06 |
||||||||
Oil equivalent ($ per boe) |
$ |
20.30 |
$ |
21.70 |
$ |
17.66 |
$ |
24.54 |
||||||||
Interest Expense ($ in millions): |
||||||||||||||||
Interest(b) |
$ |
87 |
$ |
107 |
$ |
286 |
$ |
329 |
||||||||
Interest rate derivatives – realized (gains) losses(c) |
(2) |
(2) |
(11) |
(6) |
||||||||||||
Interest rate derivatives – unrealized (gains) losses(c) |
14 |
2 |
21 |
(6) |
||||||||||||
Total Interest Expense |
$ |
99 |
$ |
107 |
$ |
296 |
$ |
317 |
(a) |
Realized gains and losses include the following items: (i) settlements and accruals for settlements of nondesignated derivatives related to current period production revenues, (ii) prior period settlements for option premiums and for early-terminated derivatives originally scheduled to settle against current period production revenues, and (iii) gains and losses related to de-designated cash flow hedges originally designated to settle against current period production revenues. Unrealized gains and losses include the change in fair value of open derivatives scheduled to settle against future period production revenues offset by amounts reclassified as realized gains and losses during the period. Although we no longer designate our derivatives as cash flow hedges for accounting purposes, we believe these definitions are useful to management and investors in determining the effectiveness of our price risk management program. |
(b) |
Net of amounts capitalized. |
(c) |
Realized (gains) losses include settlements related to the current period interest accrual and the effect of (gains) losses on early termination trades. Unrealized (gains) losses include changes in the fair value of open interest rate derivatives offset by amounts reclassified to realized (gains) losses during the period. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED CASH FLOW DATA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
THREE MONTHS ENDED: |
December 31, |
December 31, | ||||||
Beginning cash |
$ |
4 |
$ |
1,759 | ||||
Net cash provided by (used in) operating activities |
(254) |
179 | ||||||
Cash flows from investing activities: |
||||||||
Drilling and completion costs(a) |
(347) |
(399) | ||||||
Acquisitions of proved and unproved properties(b) |
(205) |
(126) | ||||||
Proceeds from divestitures of proved and unproved properties |
418 |
1 | ||||||
Additions to other property and equipment(c) |
(5) |
(29) | ||||||
Proceeds from sales of other property and equipment |
61 |
9 | ||||||
Other |
(3) |
(2) | ||||||
Net cash used in investing activities |
(81) |
(546) | ||||||
Net cash provided by (used in) financing activities |
1,213 |
(567) | ||||||
Change in cash and cash equivalents |
878 |
(934) | ||||||
Ending cash |
$ |
882 |
$ |
825 |
(a) |
Includes capitalized interest of $2 million and $2 million for the three months ended December 31, 2016 and 2015, respectively. |
(b) |
Includes capitalized interest of $56 million and $81 million for the three months ended December 31, 2016 and 2015, respectively. |
(c) |
Includes capitalized interest $1 million for the three months ended December 31, 2015. No capitalized interest was recorded for the three months ended December 31, 2016. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED CASH FLOW DATA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
YEARS ENDED: |
December 31, |
December 31, | ||||||
Beginning cash |
$ |
825 |
$ |
4,108 |
||||
Net cash provided by (used in) operating activities |
(204) |
1,234 |
||||||
Cash flows from investing activities: |
||||||||
Drilling and completion costs(a) |
(1,295) |
(3,095) |
||||||
Acquisitions of proved and unproved properties(b) |
(788) |
(533) |
||||||
Proceeds from divestitures of proved and unproved properties |
1,406 |
189 |
||||||
Additions to other property and equipment(c) |
(37) |
(143) |
||||||
Proceeds from sales of other property and equipment |
131 |
89 |
||||||
Cash paid for title defects |
(69) |
— |
||||||
Additions to investments |
— |
(1) |
||||||
Decrease in restricted cash |
— |
52 |
||||||
Other |
(8) |
(9) |
||||||
Net cash used in investing activities |
(660) |
(3,451) |
||||||
Net cash provided by (used in) financing activities |
921 |
(1,066) |
||||||
Change in cash and cash equivalents |
57 |
(3,283) |
||||||
Ending cash |
$ |
882 |
$ |
825 |
(a) |
Includes capitalized interest of $6 million and $24 million for the years ended December 31, 2016 and 2015, respectively. |
(b) |
Includes capitalized interest of $236 million and $387 million for the years ended December 31, 2016 and 2015, respectively. |
(c) |
Includes capitalized interest of $1 million and $4 million for the years ended December 31, 2016 and 2015, respectively. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||
(in millions, except per share data) | ||||||||||
(unaudited) | ||||||||||
THREE MONTHS ENDED: |
December 31, 2016 | |||||||||
$ |
Shares(a) |
$/Share(c) (d) | ||||||||
Net loss available to common stockholders |
$ |
(741) |
887 |
$ |
(0.84) |
|||||
Adjustments: |
||||||||||
Unrealized losses on commodity derivatives |
395 |
0.45 |
||||||||
Restructuring and other termination costs |
3 |
— |
||||||||
Provision for legal contingencies |
11 |
0.01 |
||||||||
Impairments of fixed assets and other |
43 |
0.05 |
||||||||
Net gains on sales of fixed assets |
(7) |
(0.01) |
||||||||
Impairments of investments |
119 |
0.13 |
||||||||
Losses on purchases or exchanges of debt |
19 |
0.02 |
||||||||
Other |
13 |
0.02 |
||||||||
Loss on exchange of preferred stock |
428 |
0.48 |
||||||||
Income tax benefit(b) |
(190) |
(0.21) |
||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
93 |
0.10 |
||||||||
Preferred stock dividends |
(30) |
(0.03) |
||||||||
Total adjusted net income attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
63 |
$ |
0.07 |
||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 211 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | |
(b) |
Our effective tax rate in the three months ended December 31, 2016 was 35.7%. | |
(c) |
Adjusted net income and adjusted earnings per common share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | |
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | |
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | |
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | |
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||
(in millions, except per share data) | ||||||||||
(unaudited) | ||||||||||
THREE MONTHS ENDED: |
December 31, 2015 | |||||||||
$ |
Shares(a) |
$/Share(c) (d) | ||||||||
Net loss available to common stockholders |
$ |
(2,228) |
663 |
$ |
(3.36) |
|||||
Adjustments: |
||||||||||
Unrealized losses on commodity derivatives |
53 |
0.08 |
||||||||
Unrealized gains on supply contract derivatives |
(5) |
(0.01) |
||||||||
Restructuring and other termination costs |
(3) |
— |
||||||||
Provision for legal contingencies |
(6) |
(0.01) |
||||||||
Impairment of oil and natural gas properties |
2,831 |
4.27 |
||||||||
Impairments of fixed assets and other |
27 |
0.04 |
||||||||
Net losses on sales of fixed assets |
1 |
— |
||||||||
Impairments of investments |
53 |
0.08 |
||||||||
Gains on purchases or exchanges of debt |
(279) |
(0.42) |
||||||||
Other |
— |
— |
||||||||
Tax effect of above items(b) |
(612) |
(0.92) |
||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
(168) |
(0.25) |
||||||||
Preferred stock dividends |
43 |
0.06 |
||||||||
Total adjusted net loss attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
(125) |
$ |
(0.19) |
||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 114 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | |
(b) |
Our effective tax rate in the three months ended December 31, 2015 was 22.9%. | |
(c) |
Adjusted net income and adjusted earnings per common share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | |
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | |
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | |
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | |
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||
(in millions, except per share data) | ||||||||||
(unaudited) | ||||||||||
YEAR ENDED: |
December 31, 2016 | |||||||||
$ |
Shares(a) |
$/Share(c) (d) | ||||||||
Net loss available to common stockholders |
$ |
(4,881) |
764 |
$ |
(6.39) |
|||||
Adjustments: |
||||||||||
Unrealized losses on commodity derivatives |
818 |
1.07 |
||||||||
Unrealized losses on supply contract derivatives |
297 |
0.39 |
||||||||
Restructuring and other termination costs |
6 |
0.01 |
||||||||
Provision for legal contingencies |
123 |
0.16 |
||||||||
Impairment of oil and natural gas properties |
2,520 |
3.30 |
||||||||
Impairments of fixed assets and other |
838 |
1.10 |
||||||||
Net gains on sales of fixed assets |
(12) |
(0.02) |
||||||||
Impairments of investments |
119 |
0.16 |
||||||||
Loss on sale of investment |
10 |
0.01 |
||||||||
Gains on purchases or exchanges of debt |
(236) |
(0.31) |
||||||||
Other |
22 |
0.03 |
||||||||
Loss on exchange of preferred stock |
428 |
0.56 |
||||||||
Income tax benefit(b) |
(190) |
(0.25) |
||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
(138) |
(0.18) |
||||||||
Preferred stock dividends |
97 |
0.13 |
||||||||
Total adjusted net loss attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
(41) |
$ |
(0.05) |
||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 247 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | |
(b) |
Our effective tax rate in the year ended December 31, 2016 was 4.2%. | |
(c) |
Adjusted net income and adjusted earnings per share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | |
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | |
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | |
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | |
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||
(in millions, except per share data) | ||||||||||
(unaudited) | ||||||||||
YEAR ENDED: |
December 31, 2015 | |||||||||
$ |
Shares(a) |
$/Share(c) (d) | ||||||||
Net loss available to common stockholders |
$ |
(14,856) |
662 |
$ |
(22.43) |
|||||
Adjustments: |
||||||||||
Unrealized losses on commodity derivatives |
687 |
1.04 |
||||||||
Unrealized gains on supply contract derivatives |
(295) |
(0.45) |
||||||||
Restructuring and other termination costs |
36 |
0.05 |
||||||||
Provision for legal contingencies |
353 |
0.53 |
||||||||
Impairment of oil and natural gas properties |
18,238 |
27.55 |
||||||||
Impairments of fixed assets and other |
194 |
0.29 |
||||||||
Net losses on sales of fixed assets |
4 |
0.01 |
||||||||
Impairments of investments |
53 |
0.08 |
||||||||
Gains on purchases or exchanges of debt |
(279) |
(0.42) |
||||||||
Tax rate adjustment |
(17) |
(0.03) |
||||||||
Other |
(9) |
(0.02) |
||||||||
Tax effect of above items(b) |
(4,438) |
(6.70) |
||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
(329) |
(0.50) |
||||||||
Preferred stock dividends |
171 |
0.26 |
||||||||
Total adjusted net loss attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
(158) |
(0.24) |
|||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 114 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | |
(b) |
Our effective tax rate in the year ended December 31, 2015 was 23.4%. | |
(c) |
Adjusted net income and adjusted earnings per common share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | |
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | |
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | |
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | |
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF OPERATING CASH FLOW AND EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
THREE MONTHS ENDED: |
December 31, |
December 31, | ||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ |
(254) |
$ |
179 |
||||
Changes in assets and liabilities |
134 |
207 |
||||||
OPERATING CASH FLOW(a) |
$ |
(120) |
$ |
386 |
||||
THREE MONTHS ENDED: |
December 31, |
December 31, | ||||||
NET LOSS |
$ |
(342) |
$ |
(2,185) |
||||
Interest expense |
99 |
107 |
||||||
Income tax benefit |
(190) |
(649) |
||||||
Depreciation and amortization of other assets |
21 |
30 |
||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
214 |
326 |
||||||
EBITDA(b) |
$ |
(198) |
$ |
(2,371) |
||||
THREE MONTHS ENDED: |
December 31, |
December 31, | ||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ |
(254) |
$ |
179 |
||||
Changes in assets and liabilities |
134 |
207 |
||||||
Interest expense, net of unrealized gains (losses) on derivatives |
85 |
104 |
||||||
Gains (losses) on commodity derivatives, net |
(444) |
284 |
||||||
Gains on supply contract derivatives, net |
— |
5 |
||||||
Cash (receipts) payments on commodity and supply contract derivative settlements, net |
40 |
(273) |
||||||
Renegotiations of natural gas gathering contracts |
49 |
— |
||||||
Stock-based compensation |
(12) |
(17) |
||||||
Restructuring and other termination costs |
(2) |
3 |
||||||
Provision for legal contingencies |
(10) |
19 |
||||||
Impairment of oil and natural gas properties |
— |
(2,831) |
||||||
Impairments of fixed assets and other |
318 |
(16) |
||||||
Net gains (losses) on sales of fixed assets |
7 |
(1) |
||||||
Investment activity |
(5) |
(39) |
||||||
Impairment of investment |
(119) |
(53) |
||||||
Gains on purchases or exchanges of debt |
(19) |
304 |
||||||
Other items |
34 |
(246) |
||||||
EBITDA(b) |
$ |
(198) |
$ |
(2,371) |
(a) |
Operating cash flow represents net cash provided by operating activities before changes in assets and liabilities. Operating cash flow is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Operating cash flow is widely accepted as a financial indicator of an oil and natural gas company's ability to generate cash that is used to internally fund exploration and development activities and to service debt. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. Operating cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities as an indicator of cash flows, or as a measure of liquidity. Operating cash flow for the three months ended December 31, 2016 includes $361 million paid to terminate certain gas gathering agreements and $49 million paid to renegotiate certain gas gathering agreements. |
(b) |
Ebitda represents net income before interest expense, income taxes, and depreciation, depletion and amortization expense. Ebitda is presented as a supplemental financial measurement in the evaluation of our business. We believe that it provides additional information regarding our ability to meet our future debt service, capital expenditures and working capital requirements. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Ebitda is also a financial measurement that, with certain negotiated adjustments, is reported to our lenders pursuant to our bank credit agreements and is used in the financial covenants in our bank credit agreements. Ebitda is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations or cash flow provided by operating activities prepared in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF OPERATING CASH FLOW AND EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
YEARS ENDED: |
December 31, |
December 31, | ||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ |
(204) |
$ |
1,234 |
||||
Changes in assets and liabilities |
732 |
1,034 |
||||||
OPERATING CASH FLOW(a) |
$ |
528 |
$ |
2,268 |
||||
YEARS ENDED: |
December 31, |
December 31, | ||||||
NET LOSS |
$ |
(4,354) |
$ |
(14,635) |
||||
Interest expense |
296 |
317 |
||||||
Income tax benefit |
(190) |
(4,463) |
||||||
Depreciation and amortization of other assets |
104 |
130 |
||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
1,002 |
2,099 |
||||||
EBITDA(b) |
$ |
(3,142) |
$ |
(16,552) |
||||
YEARS ENDED: |
December 31, |
December 31, | ||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ |
(204) |
$ |
1,234 |
||||
Changes in assets and liabilities |
732 |
1,034 |
||||||
Interest expense, net of unrealized gains (losses) on derivatives |
275 |
321 |
||||||
Gains (losses) on commodity derivatives, net |
(578) |
624 |
||||||
Gains (losses) on supply contract derivatives, net |
(151) |
295 |
||||||
Cash receipts on commodity and supply contract derivative settlements, net |
(448) |
(1,132) |
||||||
Renegotiations of natural gas gathering contracts |
115 |
— |
||||||
Stock-based compensation |
(52) |
(78) |
||||||
Restructuring and other termination costs |
(3) |
14 |
||||||
Provision for legal contingencies |
(87) |
(340) |
||||||
Impairment of oil and natural gas properties |
(2,520) |
(18,238) |
||||||
Impairments of fixed assets and other |
(467) |
(175) |
||||||
Net gains (losses) on sales of fixed assets |
12 |
(4) |
||||||
Investment activity |
(18) |
(96) |
||||||
Impairment of investment |
(119) |
(53) |
||||||
Gains on purchases or exchanges of debt |
236 |
304 |
||||||
Other items |
135 |
(262) |
||||||
EBITDA(b) |
$ |
(3,142) |
$ |
(16,552) |
(a) |
Operating cash flow represents net cash provided by operating activities before changes in assets and liabilities. Operating cash flow is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Operating cash flow is widely accepted as a financial indicator of an oil and natural gas company's ability to generate cash that is used to internally fund exploration and development activities and to service debt. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. Operating cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities as an indicator of cash flows, or as a measure of liquidity. Operating cash flow for the year ended December 31, 2016 includes $361 million paid to terminate certain gas gathering agreements and $115 million paid to renegotiate certain gas gathering agreements. |
(b) |
Ebitda represents net income before interest expense, income taxes, and depreciation, depletion and amortization expense. Ebitda is presented as a supplemental financial measurement in the evaluation of our business. We believe that it provides additional information regarding our ability to meet our future debt service, capital expenditures and working capital requirements. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Ebitda is also a financial measurement that, with certain negotiated adjustments, is reported to our lenders pursuant to our bank credit agreements and is used in the financial covenants in our bank credit agreements. Ebitda is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations or cash flow provided by operating activities prepared in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF ADJUSTED EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
THREE MONTHS ENDED: |
December 31, |
December 31, | ||||||
EBITDA |
$ |
(198) |
$ |
(2,371) |
||||
Adjustments: |
||||||||
Unrealized losses on commodity derivatives |
395 |
51 |
||||||
Unrealized gains on supply contract derivatives |
— |
(5) |
||||||
Restructuring and other termination costs |
3 |
(3) |
||||||
Provision for legal contingencies |
11 |
(6) |
||||||
Impairment of oil and natural gas properties |
— |
2,831 |
||||||
Impairments of fixed assets and other |
43 |
27 |
||||||
Net (gains) losses on sales of fixed assets |
(7) |
1 |
||||||
Impairment of investment |
119 |
53 |
||||||
(Gains) losses on purchases or exchanges of debt |
19 |
(279) |
||||||
Net income attributable to noncontrolling interests |
(1) |
— |
||||||
Other |
1 |
(1) |
||||||
Adjusted EBITDA(a) |
$ |
385 |
$ |
298 |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF ADJUSTED EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
YEARS ENDED: |
December 31, |
December 31, | ||||||
EBITDA |
$ |
(3,142) |
$ |
(16,552) |
||||
Adjustments: |
||||||||
Unrealized losses on commodity derivatives |
818 |
693 |
||||||
Unrealized (gains) losses on supply contract derivatives |
297 |
(295) |
||||||
Restructuring and other termination costs |
6 |
36 |
||||||
Provision for legal contingencies |
123 |
353 |
||||||
Impairment of oil and natural gas properties |
2,520 |
18,238 |
||||||
Impairments of fixed assets and other |
838 |
194 |
||||||
Net (gains) losses on sales of fixed assets |
(12) |
4 |
||||||
Impairment of investment |
119 |
53 |
||||||
Loss on sale of investment |
10 |
— |
||||||
Gains on purchases or exchanges of debt |
(236) |
(279) |
||||||
Net income attributable to noncontrolling interests |
(2) |
(50) |
||||||
Other |
— |
(10) |
||||||
Adjusted EBITDA(a) |
$ |
1,339 |
$ |
2,385 |
(a) |
Adjusted ebitda excludes certain items that management believes affect the comparability of operating results. The company believes these non-GAAP financial measures are a useful adjunct to ebitda because: | |
(i) |
Management uses adjusted ebitda to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | |
(ii) |
Adjusted ebitda is more comparable to estimates provided by securities analysts. | |
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | |
Accordingly, adjusted EBITDA should not be considered as a substitute for net income, income from operations or cash flow provided by operating activities prepared in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF PV-9 AND PV-10 TO STANDARDIZED MEASURE
($ in millions)
(unaudited)
PV-9 is a non-GAAP metric used in the determination of the value of collateral under Chesapeake's credit facility. PV-10 is a non-GAAP metric used by the industry, investors and analysts to estimate the present value, discounted at 10% per annum, of estimated future cash flows of the company's estimated proved reserves before income tax. The following table shows the reconciliation of PV-9 and PV-10 to the company's standardized measure of discounted future net cash flows, the most directly comparable GAAP measure, for the year ended December 31, 2015 and for the period ended December 31, 2016. Management believes that PV-9 provides useful information to investors regarding the company's collateral position and that PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, management believes the use of a pre-tax measure is valuable for evaluating the company. Neither PV-9 nor PV-10 should be considered as an alternative to the standardized measure of discounted future net cash flows as computed under GAAP.
PV-9 – December 31, 2016 @ NYMEX Strip |
$ |
11,887 |
Less: Change in discount factor from 9 to 10 |
(658) | |
PV-10 – December 31, 2016 @ NYMEX Strip |
11,229 | |
Less: Change in pricing assumption from NYMEX Strip to SEC |
(6,824) | |
PV-10 – December 31, 2016 @ SEC |
4,405 | |
Less: Present value of future income tax discounted at 10% |
(26) | |
Standardized measure of discounted future cash flows – December 31, 2016 |
$ |
4,379 |
CHESAPEAKE ENERGY CORPORATION
MANAGEMENT'S OUTLOOK AS OF FEBRUARY 23, 2017
Chesapeake periodically provides guidance on certain factors that affect the company's future financial performance. New information or changes from the company's February 14, 2017 Outlook are italicized bold below.
Year Ending | |
Adjusted Production Growth(a) |
(3%) to 2% |
Absolute Production |
|
Liquids - mmbbls |
51 - 55 |
Oil - mmbbls |
33 - 35 |
NGL - mmbbls |
18 - 20 |
Natural gas - bcf |
860 - 900 |
Total absolute production - mmboe |
194 - 205 |
Absolute daily rate - mboe |
532 - 562 |
Estimated Realized Hedging Effects(b) (based on 2/9/17 strip prices): |
|
Oil - $/bbl |
($0.15) |
Natural gas - $/mcf |
($0.24) |
NGL - $/bbl |
$0.06 |
Estimated Basis to NYMEX Prices: |
|
Oil - $/bbl |
$1.55 - $1.75 |
Natural gas - $/mcf |
$0.35 - $0.45 |
NGL - $/bbl |
$4.00 - $4.40 |
Operating Costs per Boe of Projected Production: |
|
Production expense |
$2.50 - $2.70 |
Gathering, processing and transportation expenses |
$7.00 - $7.50 |
Oil - $/bbl |
$4.25 - $4.45 |
Natural Gas - $/mcf |
$1.25 - $1.35 |
NGL - $/bbl |
$8.10 - $8.50 |
Production taxes |
$0.40 - $0.50 |
General and administrative(c) |
$1.20 - $1.30 |
Stock-based compensation (noncash) |
$0.10 - $0.20 |
DD&A of natural gas and liquids assets |
$4.00 - $5.00 |
Depreciation of other assets |
$0.40 - $0.50 |
Interest expense(d) |
$1.85 - $1.95 |
Marketing, gathering and compression net margin(e) |
($80) - ($60) |
Book Tax Rate |
0% |
Capital Expenditures ($ in millions)(f) |
$1,700 - $2,300 |
Capitalized Interest ($ in millions) |
$200 |
Total Capital Expenditures ($ in millions) |
$1,900 - $2,500 |
(a) |
Based on 2016 production of 547 mboe per day, adjusted for 2016 sales. |
(b) |
Includes expected settlements for commodity derivatives adjusted for option premiums. For derivatives closed early, settlements are reflected in the period of original contract expiration. |
(c) |
Excludes expenses associated with stock-based compensation. |
(d) |
Excludes unrealized gains (losses) on interest rate derivatives. |
(e) |
Includes revenue and operating expenses. Excludes depreciation and amortization of other assets. |
(f) |
Includes capital expenditures for drilling and completion, leasehold, geological and geophysical costs, rig termination payments and other property and plant and equipment. Excludes any additional proved property acquisitions. |
Oil, Natural Gas and Natural Gas Liquids Hedging Activities
Chesapeake enters into commodity derivative transactions in order to mitigate a portion of its exposure to adverse changes in market prices. Please see the quarterly reports on Form 10-Q and annual reports on Form 10-K filed by Chesapeake with the SEC for detailed information about derivative instruments the company uses, its quarter-end derivative positions and accounting for oil, natural gas and natural gas liquids derivatives.
As of February 22, 2017, the company had downside protection, through open swaps, on its 2017 oil production at an average price of $50.19 per bbl. The company had downside price protection, through open swaps and two-way collars, on its 2017 natural gas production at an average price of $3.07 per mcf. Chesapeake also had downside price protection, through open swaps, on a portion of its 2017 ethane production at an average price of $0.28 per gallon.
In addition, the company had downside protection, through open swaps and two-way collars, on a portion of its 2018 natural gas production at an average price of $3.09 per mcf.
The company's crude oil hedging positions as of February 22, 2017 were as follows:
Open Crude Oil Swaps; Gains from Closed | |||||||||
Crude Oil Trades and Call Option Premiums | |||||||||
Open Swaps (mbbls) |
Avg. NYMEX Price of Open Swaps |
Total Gains from Closed Trades and Premiums for Call Options ($ in millions) | |||||||
Q1 2017 |
5,850 |
$ |
50.01 |
$ |
22 |
||||
Q2 2017 |
5,915 |
$ |
50.12 |
23 |
|||||
Q3 2017 |
5,612 |
$ |
50.27 |
23 |
|||||
Q4 2017 |
5,612 |
$ |
50.36 |
23 |
|||||
Total 2017 |
22,989 |
$ |
50.19 |
$ |
91 |
||||
Total 2018 – 2022 |
$ |
(13) |
Crude Oil Net Written Call Options | ||||
Call Options (mbbls) |
Avg. NYMEX Strike Price | |||
Q1 2017 |
1,305 |
$ |
83.50 |
|
Q2 2017 |
1,320 |
$ |
83.50 |
|
Q3 2017 |
1,334 |
$ |
83.50 |
|
Q4 2017 |
1,334 |
$ |
83.50 |
|
Total 2017 |
5,293 |
$ |
83.50 |
The company's natural gas hedging positions as of February 22, 2017 were as follows:
Open Natural Gas Swaps; Losses from Closed | |||||||||
Natural Gas Trades and Call Option Premiums | |||||||||
Open Swaps (bcf) |
Avg. NYMEX Price of Open Swaps |
Total Losses from Closed Trades and Premiums for Call Options ($ in millions) | |||||||
Q1 2017 |
144 |
$ |
3.22 |
$ |
(3) |
||||
Q2 2017 |
157 |
$ |
2.96 |
(1) |
|||||
Q3 2017 |
158 |
$ |
3.00 |
(2) |
|||||
Q4 2017 |
140 |
$ |
3.10 |
(3) |
|||||
Total 2017 |
599 |
$ |
3.07 |
$ |
(9) |
||||
Total 2018 – 2022 |
120 |
$ |
3.13 |
$ |
(69) |
Natural Gas Two-Way Collars | |||||||
Open |
Avg. |
Avg. | |||||
Q1 2017 |
23 |
$ |
3.00 |
$ |
3.48 |
||
Total 2017 |
23 |
$ |
3.00 |
$ |
3.48 |
||
Total 2018 |
47 |
$ |
3.00 |
$ |
3.25 |
Natural Gas Net Written Call Options | ||||
Call Options (bcf) |
Avg. NYMEX Strike Price | |||
Q1 2017 |
12 |
$ |
9.43 |
|
Q2 2017 |
12 |
$ |
9.43 |
|
Q3 2017 |
12 |
$ |
9.43 |
|
Q4 2017 |
12 |
$ |
9.43 |
|
Total 2017 |
48 |
$ |
9.43 |
|
Total 2018 – 2020 |
66 |
$ |
12.00 |
Natural Gas Basis Protection Swaps | ||||
Volume (bcf) |
Avg. NYMEX | |||
Q1 2017 |
13 |
$ |
0.35 | |
Q2 2017 |
5 |
$ |
(0.46) | |
Q3 2017 |
6 |
$ |
(0.46) | |
Q4 2017 |
6 |
$ |
(0.46) | |
Total 2017 |
30 |
$ |
(0.11) | |
Total 2018 |
1 |
$ |
(1.03) |
The company's natural gas liquids hedging positions as of February 22, 2017 were as follows:
Open Ethane Swaps | ||||
Volume (mmgal) |
Avg. NYMEX | |||
Q1 2017 |
26 |
$ |
0.28 | |
Q2 2017 |
27 |
$ |
0.28 | |
Total 2017 |
53 |
$ |
0.28 |
SOURCE Chesapeake Energy Corporation
OKLAHOMA CITY, Nov. 3, 2016 /PRNewswire/ -- Chesapeake Energy Corporation (NYSE: CHK) today reported financial and operational results for the 2016 third quarter plus other recent developments. Highlights include:
Doug Lawler, Chesapeake's Chief Executive Officer, commented, "We continue to make progress in reducing leverage, decreasing total cash costs and improving future midstream expenses. Our achievements in these areas, particularly in regard to our balance sheet, provide a stronger foundation for improving profitability and enhanced returns from our capital program in 2017 and beyond. As we have previously stated, our large resource base and significant inventory of high-return drilling opportunities offer long-term growth and flexibility for our shareholders."
2016 Third Quarter Results
For the 2016 third quarter, Chesapeake's revenues declined by 33% year over year due to a decrease in the average realized commodity prices received for its production, lower production volumes and a decrease in the volumes sold and prices received by the company's marketing affiliate on behalf of third-party producers. Average daily production for the 2016 third quarter of approximately 638,100 barrels of oil equivalent (boe) consisted of approximately 86,600 barrels (bbls) of oil, 2.914 billion cubic feet (bcf) of natural gas and 65,700 bbls of natural gas liquids (NGL).
Chesapeake's operating expenses continue to decline. Average production expenses during the 2016 third quarter were $2.80 per boe, while G&A expenses (including stock-based compensation) during the 2016 third quarter were $1.08 per boe. Combined production and G&A expenses (including stock-based compensation) during the 2016 third quarter were $3.88 per boe, a decrease of 20% year over year and 5% from the 2016 second quarter. A summary of the company's production and operating cost guidance for 2016 and 2017 is provided in the Outlook dated November 3, 2016, beginning on Page 20.
Chesapeake reported a net loss available to common stockholders of $1.197 billion, or $1.54 per share, while the company's ebitda for the 2016 third quarter was a loss of $801 million. The primary drivers of the net loss were Barnett Shale exit costs of approximately $616 million and a noncash impairment of the carrying value of Chesapeake's oil and natural gas properties of approximately $433 million, largely resulting from decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices as of September 30, 2016, as compared to June 30, 2016. Adjusting for these and other items that are typically excluded by securities analysts, the 2016 third quarter adjusted net income available to common stockholders was $27 million, or $0.09 per common share, while the company's adjusted ebitda was $421 million in the 2016 third quarter. These adjusted results include a recorded gain of $146 million of proceeds related to the sale of a long-term natural gas supply contract which was sold in the 2016 third quarter and reflected in the company's marketing, gathering and compression revenues. Reconciliations of financial measures calculated in accordance with generally accepted accounting principles (GAAP) to non-GAAP measures are provided on pages 12 – 18 of this release.
Capital Spending Overview
Chesapeake's total capital investments were approximately $412 million during the 2016 third quarter, compared to approximately $623 million in the 2015 third quarter, as summarized in the table below. A summary of the company's capital expenditure guidance for 2016 and 2017 is provided in the Outlook dated November 3, 2016, beginning on Page 20.
2016 |
2016 |
2015 | |||||||
Operated activity comparison |
Q3 |
Q2 |
Q3 | ||||||
Average rig count |
11 |
9 |
18 | ||||||
Gross wells completed |
80 |
131 |
84 | ||||||
Gross wells spud |
63 |
49 |
81 | ||||||
Gross wells connected |
105 |
141 |
112 | ||||||
Type of cost ($ in millions) |
|||||||||
Drilling and completion costs |
$ |
332 |
$ |
337 |
$ |
467 |
|||
Exploration costs, leasehold and additions to other PP&E |
21 |
56 |
57 |
||||||
Subtotal capital expenditures |
$ |
353 |
$ |
393 |
$ |
524 |
|||
Capitalized interest |
59 |
63 |
99 |
||||||
Total guided capital expenditures |
$ |
412 |
$ |
456 |
$ |
623 |
Balance Sheet and Liquidity
As of September 30, 2016, Chesapeake's debt principal balance was approximately $8.7 billion, including approximately $240 million of borrowings outstanding on the company's revolving credit facility, compared to $9.7 billion as of December 31, 2015, and $11.7 billion as of September 30, 2015.
During the 2016 third quarter, the company entered into a $1.5 billion secured five-year term loan facility. Chesapeake used the net proceeds from this term loan to purchase and retire $898 million principal amount of its senior notes and $708 million principal amount of its contingent convertible senior notes for $1.5 billion pursuant to tender offers.
In October 2016, Chesapeake issued in a private placement $1.25 billion principal amount of unsecured 5.5% Convertible Senior Notes due 2026. The company intends to use the net proceeds for general corporate purposes, which may include debt repurchases and the repayment of borrowings under its credit facility and senior notes with near-term maturities as they become due. Additionally, the company completed private exchanges in aggregate of approximately 110.3 million shares of its common stock for 134,000 shares of 5.00% Cumulative Convertible Preferred Stock (Series 2005B), 606,271 shares of 5.75% Cumulative Convertible Preferred Stock and 553,007 shares of 5.75% Cumulative Convertible Preferred Stock (Series A). This amount of preferred stock represents approximately $1.2 billion of liquidation value, which was exchanged at a discount of approximately 40%. The company also repurchased in the open market approximately $105 million principal amount of its outstanding debt scheduled to mature or that could be put to the company in 2017 and 2018 for $106 million.
Since September 30, 2015, Chesapeake has significantly reduced its near-term debt maturities. As of November 2, 2016, Chesapeake's principal debt maturities by year, including debt that could be put to the company, are as follows:
Principal Amount | ||||||
11/2/2016 |
9/30/2015 | |||||
2016 |
$ |
— |
$ |
500 |
||
2017 |
625 |
2,212 |
||||
2018 |
599 |
1,016 |
||||
2019 |
504 |
1,500 |
||||
2020-2026 (a) |
7,894 |
6,496 |
||||
Total |
$ |
9,622 |
$ |
11,724 |
||
(a) Includes $1.25 billion principal amount of unsecured 5.5% Convertible Senior Notes issued on October 5, 2016. |
Asset Acquisitions and Divestitures Update
In the 2016 third quarter, the company entered into an agreement to convey its interests in the Barnett Shale operating area located in North Texas to Total S.A. (NYSE: TOT) and simultaneously terminate future commitments associated with this asset. The transaction closed on October 31, 2016, and Chesapeake paid $334 million to terminate an existing gathering agreement with Williams Partners L.P. (NYSE: WPZ) ("Williams").
Also in the 2016 third quarter, the company entered into a purchase and sale agreement to sell the majority of its upstream and midstream assets in the Devonian Shale located in West Virginia and Kentucky, which includes approximately 882,000 net acres and approximately 5,600 wells along with related gathering assets, as well as other property, plant and equipment. Chesapeake will retain deep drilling rights in the area after the anticipated disposition. In connection with this divestiture, the company expects to repurchase one of its two remaining volumetric production payment (VPP) transactions. All of the acquired interests will be conveyed in the divestiture and the company will no longer have any future obligations related to this VPP. After the repurchase of this VPP, the company expects net cash proceeds from this disposition to be nominal.
In the 2016 third quarter, Chesapeake purchased additional working interests in certain of its operated properties in its Haynesville Shale operating area for approximately $85 million, adding approximately 72,500 net acres to its net acreage position and approximately 55 million cubic feet (mmcf) per day of net natural gas production.
The company continues to focus on select asset divestitures and is currently planning to sell additional properties by year-end 2016, including a portion of its Haynesville Shale properties.
Midstream Update
In addition to the gas gathering agreement termination with Williams in the Barnett Shale, Chesapeake renegotiated its existing cost-of-service gas gathering agreement with Williams in the Mid-Continent operating area to a fixed-fee arrangement in exchange for a $66 million payment in the 2016 third quarter. This new agreement became effective July 1, 2016.
The company also accelerated the value of a long-term natural gas supply contract in the 2016 third quarter by selling rights under a long-term gas supply agreement for $146 million in cash proceeds. In connection with this sale, the company reversed a $280 million derivative asset which was reflected as an unrealized hedging loss during the current quarter.
In October 2016, Chesapeake announced that it signed a letter of intent to restructure its natural gas gathering and service agreement in its Powder River Basin operating area with Williams and Crestwood Equity Partners L.P. (NYSE: CEQP). The restructured services are expected to replace the current cost-of-service arrangement and improve economics which support increased development across an expanded area of dedication in the region. Subject to board approvals from all three companies of the definitive agreement, the restructured services are to become effective January 1, 2017, for a 20-year term.
Operations Update
Chesapeake's average daily production for the 2016 third quarter was approximately 638,100 boe and is further detailed in the table below. For the 2016 fourth quarter, the company expects its average daily production to range between 550,000 and 570,000 boe (including approximately one month of production from the Barnett Shale assets). With average daily oil production of approximately 91,000 barrels per day for the month of October 2016, the company expects its average daily oil production to range between 90,000 and 95,000 barrels per day for the 2016 fourth quarter.
Chesapeake currently expects its exit rate production to grow significantly over the next two years. The company is currently projecting an exit-to-exit increase in total production from the fourth quarter of 2016 to the fourth quarter of 2017 of approximately 7%, adjusted for asset sales. More importantly, the company is projecting an exit-to-exit increase in its oil production from the fourth quarter of 2016 to the fourth quarter of 2017 of approximately 10%. For 2018, the company is currently projecting an increase in its total production from the fourth quarter of 2017 to the fourth quarter of 2018 of approximately 15%, primarily driven by an exit-to-exit increase in its oil production from the fourth quarter of 2017 to the fourth quarter of 2018 of approximately 20%. Chesapeake's projected growth rates are preliminary and its flexible capital expenditure program will be adjusted based on prevailing market conditions and are subject to final capital allocation decisions for 2017 and 2018.
2016 |
2016 |
2015 | ||||
Operating area net production (mboe/day) |
Q3 |
Q2 |
Q3 | |||
Eagle Ford |
101 |
92 |
108 |
|||
Haynesville |
139 |
126 |
106 |
|||
Marcellus |
134 |
134 |
135 |
|||
Utica |
127 |
137 |
106 |
|||
Mid-Continent |
55 |
78 |
118 |
|||
Powder River Basin |
14 |
16 |
21 |
|||
Barnett |
59 |
65 |
63 |
|||
Other |
9 |
9 |
10 |
|||
Total production |
638 |
657 |
667 |
Chesapeake is currently utilizing 11 drilling rigs across its operating areas, three of which are located in the Eagle Ford Shale, three in the Haynesville Shale, three in the Mid-Continent area and two rigs in the Utica Shale. Chesapeake plans to utilize its existing rigs through year-end and plans to drill 50 to 60 wells and place approximately 100 to 110 wells on production in the 2016 fourth quarter.
Key Financial and Operational Results
The table below summarizes Chesapeake's key financial and operational results during the 2016 third quarter as compared to results in prior periods.
Three Months Ended | |||||||||||||||||||||||
09/30/16 |
06/30/16 |
09/30/15 | |||||||||||||||||||||
Oil equivalent production (in mmboe) |
59 |
60 |
61 |
||||||||||||||||||||
Oil production (in mmbbls) |
8 |
8 |
11 |
||||||||||||||||||||
Average realized oil price ($/bbl)(a) |
45.24 |
44.31 |
66.04 |
||||||||||||||||||||
Natural gas production (in bcf) |
268 |
269 |
263 |
||||||||||||||||||||
Average realized natural gas price ($/mcf)(a) |
2.13 |
1.97 |
2.51 |
||||||||||||||||||||
NGL production (in mmbbls) |
6 |
7 |
7 |
||||||||||||||||||||
Average realized NGL price ($/bbl)(a) |
13.70 |
12.88 |
10.90 |
||||||||||||||||||||
Production expenses ($/boe) |
(2.80) |
(3.05) |
(4.09) |
||||||||||||||||||||
Gathering, processing and transportation expenses ($/boe) |
(8.07) |
(8.04) |
(7.88) |
||||||||||||||||||||
Oil - ($/bbl) |
(3.67) |
(3.64) |
(3.35) |
||||||||||||||||||||
Natural Gas - ($/mcf) |
(1.47) |
(1.48) |
(1.49) |
||||||||||||||||||||
NGL - ($/bbl) |
(8.13) |
(7.61) |
(8.03) |
||||||||||||||||||||
Production taxes ($/boe) |
(0.29) |
(0.32) |
(0.42) |
||||||||||||||||||||
General and administrative expenses ($/boe)(b) |
(0.90) |
(0.86) |
(0.64) |
||||||||||||||||||||
Stock-based compensation ($/boe) |
(0.18) |
(0.16) |
(0.15) |
||||||||||||||||||||
DD&A of oil and natural gas properties ($/boe) |
(4.35) |
(4.43) |
(7.95) |
||||||||||||||||||||
DD&A of other assets ($/boe) |
(0.42) |
(0.48) |
(0.51) |
||||||||||||||||||||
Interest expenses ($/boe)(a) |
(1.20) |
(1.00) |
(1.41) |
||||||||||||||||||||
Marketing, gathering and compression net margin ($ in millions)(c) |
(162) |
(25) |
58 |
||||||||||||||||||||
Operating cash flow ($ in millions)(d) |
209 |
176 |
476 |
||||||||||||||||||||
Operating cash flow ($/boe) |
3.56 |
2.94 |
7.76 |
||||||||||||||||||||
Adjusted ebitda ($ in millions)(e) |
421 |
252 |
560 |
||||||||||||||||||||
Adjusted ebitda ($/boe) |
7.17 |
4.21 |
9.12 |
||||||||||||||||||||
Net loss available to common stockholders ($ in millions) |
(1,197) |
(1,792) |
(4,695) |
||||||||||||||||||||
Loss per share – diluted ($) |
(1.54) |
(2.48) |
(7.08) |
||||||||||||||||||||
Adjusted net income (loss) available to common stockholders ($ in millions)(f) |
27 |
(145) |
(83) |
||||||||||||||||||||
Adjusted income (loss) per share ($)(g) |
0.09 |
(0.14) |
(0.06) |
||||||||||||||||||||
(a) |
Includes the effects of realized gains (losses) from hedging, but excludes the effects of unrealized gains (losses) from hedging. | ||||||||||||||||||||||
(b) |
Excludes expenses associated with stock-based compensation and restructuring and other termination costs. | ||||||||||||||||||||||
(c) |
Includes revenue, operating expenses and unrealized gains (losses) on supply contract derivatives, but excludes depreciation and amortization of other assets. For the three months ended September 30, 2016, June 30, 2016 and September 30, 2015, unrealized gains (losses) were ($280 million), ($37 million) and $70 million, respectively. Additionally, the three months ended September 30, 2016 includes $146 million of proceeds related to the sale of the supply contract. | ||||||||||||||||||||||
(d) |
Defined as cash flow provided by operating activities before changes in assets and liabilities. | ||||||||||||||||||||||
(e) |
Defined as net income before interest expense, income taxes and depreciation, depletion and amortization expense, as adjusted to remove the effects of certain items detailed on page 18. | ||||||||||||||||||||||
(f) |
Defined as net income available to common stockholders, as adjusted to remove the effects of certain items detailed on page 12. | ||||||||||||||||||||||
(g) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
2016 Third Quarter Financial and Operational Results Conference Call Information
A conference call to discuss this release has been scheduled on Thursday, November 3, 2016, at 9:00 am EDT. The telephone number to access the conference call is 913-312-6668 or toll-free 888-609-5667. The passcode for the call is 2510197. The number to access the conference call replay is 719-457-0820 or toll-free 888-203-1112 and the passcode for the replay is 2510197. The conference call will be webcast and can be found at www.chk.com in the "Investors" section of the company's website. The webcast of the conference will be available on the website for one year.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. The company also owns oil and natural gas marketing and natural gas gathering and compression businesses. Further information is available at www.chk.com where Chesapeake routinely posts announcements, updates, events, investor information, presentations and news releases.
This news release and the accompanying Outlook include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements that give our current expectations or forecasts of future events, production and well connection forecasts, estimates of operating costs, anticipated capital and operational efficiencies, planned development drilling and expected drilling cost reductions, general and administrative expenses, capital expenditures, the timing of anticipated noncore asset sales and proceeds to be received therefrom, projected cash flow and liquidity, our ability to enhance our cash flow and financial flexibility, plans and objectives for future operations (including our ability to optimize base production and execute gas gathering agreements), the ability of our employees, portfolio strength and operational leadership to create long-term value, and the assumptions on which such statements are based. Although we believe the expectations and forecasts reflected in the forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties.
Factors that could cause actual results to differ materially from expected results include those described under "Risk Factors" in Item 1A of our annual report on Form 10-K and any updates to those factors set forth in Chesapeake's subsequent quarterly reports on Form 10-Q or current reports on Form 8-K (available at http://www.chk.com/investors/sec-filings). These risk factors include the volatility of oil, natural gas and NGL prices; the limitations our level of indebtedness may have on our financial flexibility; our inability to access the capital markets on favorable terms or at all; the availability of cash flows from operations and other funds to finance reserve replacement costs or satisfy our debt obligations; a further downgrade in our credit rating requiring us to post more collateral under certain commercial arrangements; write-downs of our oil and natural gas asset carrying values due to low commodity prices; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities of oil, natural gas and NGL reserves and projecting future rates of production and the amount and timing of development expenditures; our ability to generate profits or achieve targeted results in drilling and well operations; leasehold terms expiring before production can be established; commodity derivative activities resulting in lower prices realized on oil, natural gas and NGL sales; the need to secure derivative liabilities and the inability of counterparties to satisfy their obligations; adverse developments or losses from pending or future litigation and regulatory proceedings, including royalty claims; charges incurred in response to market conditions and in connection with our ongoing actions to reduce financial leverage and complexity; drilling and operating risks and resulting liabilities; effects of environmental protection laws and regulation on our business; legislative and regulatory initiatives further regulating hydraulic fracturing; our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used; impacts of potential legislative and regulatory actions addressing climate change; federal and state tax proposals affecting our industry; potential OTC derivatives regulation limiting our ability to hedge against commodity price fluctuations; competition in the oil and gas exploration and production industry; a deterioration in general economic, business or industry conditions; negative public perceptions of our industry; limited control over properties we do not operate; pipeline and gathering system capacity constraints and transportation interruptions; terrorist activities and cyber-attacks adversely impacting our operations; potential challenges of our spin-off of Seventy Seven Energy Inc. (SSE) in connection with SSE's recently completed bankruptcy under Chapter 11 of the U.S. Bankruptcy Code; an interruption in operations at our headquarters due to a catastrophic event; the continuation of suspended dividend payments on our common stock and preferred stock; certain anti-takeover provisions that affect shareholder rights; and our inability to increase or maintain our liquidity through debt repurchases, capital exchanges, asset sales, joint ventures, farmouts or other means.
In addition, disclosures concerning the estimated contribution of derivative contracts to our future results of operations are based upon market information as of a specific date. These market prices are subject to significant volatility. Our production forecasts are also dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Expected asset sales may not be completed in the time frame anticipated or at all. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release, and we undertake no obligation to update any of the information provided in this release or the accompanying Outlook, except as required by applicable law.
INVESTOR CONTACT: |
MEDIA CONTACT: |
Brad Sylvester, CFA |
Gordon Pennoyer |
(405) 935-8870 |
(405) 935-8878 |
CHESAPEAKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in millions, except per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
2016 |
2015 | |||||||
REVENUES: |
||||||||
Oil, natural gas and NGL |
$ |
1,177 |
$ |
1,363 |
||||
Marketing, gathering and compression |
1,099 |
2,013 |
||||||
Total Revenues |
2,276 |
3,376 |
||||||
OPERATING EXPENSES: |
||||||||
Oil, natural gas and NGL production |
164 |
251 |
||||||
Oil, natural gas and NGL gathering, processing and transportation |
473 |
483 |
||||||
Production taxes |
17 |
25 |
||||||
Marketing, gathering and compression |
1,261 |
1,955 |
||||||
General and administrative |
63 |
49 |
||||||
Restructuring and other termination costs |
— |
53 |
||||||
Provision for legal contingencies |
8 |
— |
||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
255 |
488 |
||||||
Depreciation and amortization of other assets |
25 |
31 |
||||||
Impairment of oil and natural gas properties |
433 |
5,416 |
||||||
Impairments of fixed assets and other |
751 |
79 |
||||||
Net gains on sales of fixed assets |
— |
(1) |
||||||
Total Operating Expenses |
3,450 |
8,829 |
||||||
LOSS FROM OPERATIONS |
(1,174) |
(5,453) |
||||||
OTHER INCOME (EXPENSE): |
||||||||
Interest expense |
(73) |
(88) |
||||||
Losses on investments |
(1) |
(33) |
||||||
Gains on purchases or exchanges of debt |
87 |
— |
||||||
Other income (expense) |
7 |
(2) |
||||||
Total Other Income (Expense) |
20 |
(123) |
||||||
LOSS BEFORE INCOME TAXES |
(1,154) |
(5,576) |
||||||
INCOME TAX BENEFIT: |
||||||||
Current income taxes |
— |
— |
||||||
Deferred income taxes |
— |
(937) |
||||||
Total Income Tax Benefit |
— |
(937) |
||||||
NET LOSS |
(1,154) |
(4,639) |
||||||
Net income attributable to noncontrolling interests |
(1) |
(13) |
||||||
NET LOSS ATTRIBUTABLE TO CHESAPEAKE |
(1,155) |
(4,652) |
||||||
Preferred stock dividends |
(42) |
(43) |
||||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS |
$ |
(1,197) |
$ |
(4,695) |
||||
LOSS PER COMMON SHARE: |
||||||||
Basic |
$ |
(1.54) |
$ |
(7.08) |
||||
Diluted |
$ |
(1.54) |
$ |
(7.08) |
||||
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): |
||||||||
Basic |
777 |
663 |
||||||
Diluted |
777 |
663 |
CHESAPEAKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in millions, except per share data) | ||||||||
(unaudited) | ||||||||
Nine Months Ended | ||||||||
2016 |
2015 | |||||||
REVENUES: |
||||||||
Oil, natural gas and NGL |
$ |
2,610 |
$ |
4,122 |
||||
Marketing, gathering and compression |
3,241 |
5,993 |
||||||
Total Revenues |
5,851 |
10,115 |
||||||
OPERATING EXPENSES: |
||||||||
Oil, natural gas and NGL production |
552 |
826 |
||||||
Oil, natural gas and NGL gathering, processing and transportation |
1,436 |
1,429 |
||||||
Production taxes |
54 |
87 |
||||||
Marketing, gathering and compression |
3,410 |
5,751 |
||||||
General and administrative |
172 |
174 |
||||||
Restructuring and other termination costs |
3 |
39 |
||||||
Provision for legal contingencies |
112 |
359 |
||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
791 |
1,773 |
||||||
Depreciation and amortization of other assets |
83 |
100 |
||||||
Impairment of oil and natural gas properties |
2,331 |
15,407 |
||||||
Impairments of fixed assets and other |
795 |
167 |
||||||
Net (gains) losses on sales of fixed assets |
(5) |
3 |
||||||
Total Operating Expenses |
9,734 |
26,115 |
||||||
LOSS FROM OPERATIONS |
(3,883) |
(16,000) |
||||||
OTHER INCOME (EXPENSE): |
||||||||
Interest expense |
(197) |
(210) |
||||||
Losses on investments |
(3) |
(57) |
||||||
Loss on sale of investment |
(10) |
— |
||||||
Gains on purchases or exchanges of debt |
255 |
— |
||||||
Other income |
13 |
3 |
||||||
Total Other Income (Expense) |
58 |
(264) |
||||||
LOSS BEFORE INCOME TAXES |
(3,825) |
(16,264) |
||||||
INCOME TAX BENEFIT: |
||||||||
Current income taxes |
— |
(6) |
||||||
Deferred income taxes |
— |
(3,808) |
||||||
Total Income Tax Benefit |
— |
(3,814) |
||||||
NET LOSS |
(3,825) |
(12,450) |
||||||
Net income attributable to noncontrolling interests |
(1) |
(50) |
||||||
NET LOSS ATTRIBUTABLE TO CHESAPEAKE |
(3,826) |
(12,500) |
||||||
Preferred stock dividends |
(127) |
(128) |
||||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS |
$ |
(3,953) |
$ |
(12,628) |
||||
LOSS PER COMMON SHARE: |
||||||||
Basic |
$ |
(5.47) |
$ |
(19.07) |
||||
Diluted |
$ |
(5.47) |
$ |
(19.07) |
||||
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions): |
||||||||
Basic |
722 |
662 |
||||||
Diluted |
722 |
662 |
CHESAPEAKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
September 30, 2016 |
December 31, 2015 | |||||||
Cash and cash equivalents |
$ |
4 |
$ |
825 |
||||
Other current assets |
1,063 |
1,655 |
||||||
Total Current Assets |
1,067 |
2,480 |
||||||
Property and equipment, (net) |
11,051 |
14,298 |
||||||
Other assets |
405 |
536 |
||||||
Total Assets |
$ |
12,523 |
$ |
17,314 |
||||
Current liabilities |
$ |
3,606 |
$ |
3,685 |
||||
Long-term debt, net |
9,022 |
10,311 |
||||||
Other long-term liabilities |
827 |
921 |
||||||
Total Liabilities |
13,455 |
14,917 |
||||||
Preferred stock |
3,036 |
3,062 |
||||||
Noncontrolling interests |
259 |
259 |
||||||
Common stock and other stockholders' equity |
(4,227) |
(924) |
||||||
Total Equity |
(932) |
2,397 |
||||||
Total Liabilities and Equity |
$ |
12,523 |
$ |
17,314 |
||||
Common shares outstanding (in millions) |
776 |
663 |
||||||
Principal amount of debt outstanding |
$ |
8,717 |
$ |
9,706 |
CHESAPEAKE ENERGY CORPORATION | ||||||||||||||||||
SUPPLEMENTAL DATA – OIL, NATURAL GAS AND NGL PRODUCTION, SALES AND INTEREST EXPENSE | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Three Months Ended |
Nine Months Ended | |||||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||||
Net Production: |
||||||||||||||||||
Oil (mmbbl) |
8 |
11 |
25 |
32 |
||||||||||||||
Natural gas (bcf) |
268 |
263 |
814 |
802 |
||||||||||||||
NGL (mmbbl) |
6 |
7 |
19 |
21 |
||||||||||||||
Oil equivalent (mmboe) |
59 |
61 |
180 |
187 |
||||||||||||||
Oil, natural gas and NGL Sales ($ in millions): |
||||||||||||||||||
Oil sales |
$ |
342 |
$ |
469 |
$ |
952 |
$ |
1,549 |
||||||||||
Oil derivatives – realized gains (losses)(a) |
18 |
224 |
102 |
641 |
||||||||||||||
Oil derivatives – unrealized gains (losses)(a) |
23 |
(100) |
(217) |
(444) |
||||||||||||||
Total Oil Sales |
383 |
593 |
837 |
1,746 |
||||||||||||||
Natural gas sales |
622 |
590 |
1,545 |
1,937 |
||||||||||||||
Natural gas derivatives – realized gains (losses)(a) |
(50) |
70 |
192 |
341 |
||||||||||||||
Natural gas derivatives – unrealized gains (losses)(a) |
131 |
33 |
(204) |
(198) |
||||||||||||||
Total Natural Gas Sales |
703 |
693 |
1,533 |
2,080 |
||||||||||||||
NGL sales |
84 |
77 |
247 |
296 |
||||||||||||||
NGL derivatives – realized gains (losses)(a) |
(2) |
— |
(5) |
— |
||||||||||||||
NGL derivatives – unrealized gains (losses)(a) |
9 |
— |
(2) |
— |
||||||||||||||
Total NGL Sales |
91 |
77 |
240 |
296 |
||||||||||||||
Total Oil, Natural Gas and NGL Sales |
$ |
1,177 |
$ |
1,363 |
$ |
2,610 |
$ |
4,122 |
||||||||||
Average Sales Price – excluding gains (losses) on derivatives: |
||||||||||||||||||
Oil ($ per bbl) |
$ |
42.94 |
$ |
44.60 |
$ |
38.21 |
$ |
47.90 |
||||||||||
Natural gas ($ per mcf) |
$ |
2.32 |
$ |
2.25 |
$ |
1.90 |
$ |
2.41 |
||||||||||
NGL ($ per bbl) |
$ |
13.93 |
$ |
10.90 |
$ |
12.90 |
$ |
14.06 |
||||||||||
Oil equivalent ($ per boe) |
$ |
17.86 |
$ |
18.52 |
$ |
15.27 |
$ |
20.21 |
||||||||||
Average Sales Price –including realized gains (losses) on derivatives: |
||||||||||||||||||
Oil ($ per bbl) |
$ |
45.24 |
$ |
66.04 |
$ |
42.31 |
$ |
67.73 |
||||||||||
Natural gas ($ per mcf) |
$ |
2.13 |
$ |
2.51 |
$ |
2.13 |
$ |
2.84 |
||||||||||
NGL ($ per bbl) |
$ |
13.70 |
$ |
10.90 |
$ |
12.66 |
$ |
14.06 |
||||||||||
Oil equivalent ($ per boe) |
$ |
17.30 |
$ |
23.33 |
$ |
16.88 |
$ |
25.47 |
||||||||||
Interest Expense ($ in millions): |
||||||||||||||||||
Interest(b) |
$ |
74 |
$ |
88 |
$ |
199 |
$ |
222 |
||||||||||
Interest rate derivatives – realized (gains) losses(c) |
(3) |
(2) |
(9) |
(4) |
||||||||||||||
Interest rate derivatives – unrealized (gains) losses(c) |
2 |
2 |
7 |
(8) |
||||||||||||||
Total Interest Expense |
$ |
73 |
$ |
88 |
$ |
197 |
$ |
210 |
||||||||||
(a) |
Realized gains and losses include the following items: (i) settlements of nondesignated derivatives related to current period production revenues, (ii) prior period settlements for option premiums and for early-terminated derivatives originally scheduled to settle against current period production revenues, and (iii) gains and losses related to de-designated cash flow hedges originally designated to settle against current period production revenues. Unrealized gains and losses include the change in fair value of open derivatives scheduled to settle against future period production revenues offset by amounts reclassified as realized gains and losses during the period. Although we no longer designate our derivatives as cash flow hedges for accounting purposes, we believe these definitions are useful to management and investors in determining the effectiveness of our price risk management program. | |||||||||||||||||
(b) |
Net of amounts capitalized. | |||||||||||||||||
(c) |
Realized (gains) losses include settlements related to the current period interest accrual and the effect of (gains) losses on early termination trades. Unrealized (gains) losses include changes in the fair value of open interest rate derivatives offset by amounts reclassified to realized (gains) losses during the period. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||||||||||||||
CONDENSED CONSOLIDATED CASH FLOW DATA | ||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
THREE MONTHS ENDED: |
September 30, |
September 30, | ||||||||||||||||||||
Beginning cash |
$ |
4 |
$ |
2,051 |
||||||||||||||||||
Net cash provided by operating activities |
376 |
318 |
||||||||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||
Drilling and completion costs(a) |
(339) |
(528) |
||||||||||||||||||||
Acquisitions of proved and unproved properties(b) |
(157) |
(141) |
||||||||||||||||||||
Proceeds from divestitures of proved and unproved properties |
24 |
174 |
||||||||||||||||||||
Additions to other property and equipment(c) |
(7) |
(21) |
||||||||||||||||||||
Proceeds from sales of other property and equipment |
— |
73 |
||||||||||||||||||||
Decrease in restricted cash |
— |
52 |
||||||||||||||||||||
Other |
(1) |
(2) |
||||||||||||||||||||
Net cash used in investing activities |
(480) |
(393) |
||||||||||||||||||||
Net cash provided by (used in) financing activities |
104 |
(217) |
||||||||||||||||||||
Change in cash and cash equivalents |
— |
(292) |
||||||||||||||||||||
Ending cash |
$ |
4 |
$ |
1,759 |
||||||||||||||||||
(a) |
Includes capitalized interest of $1 million and $3 million for the three months ended September 30, 2016 and 2015, respectively. | |||||||||||||||||||||
(b) |
Includes capitalized interest of $56 million and $93 million for the three months ended September 30, 2016 and 2015, respectively. | |||||||||||||||||||||
(c) |
Includes capitalized interest of a nominal amount and $1 million for the three months ended September 30, 2016 and 2015, respectively. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||||||||||||||
CONDENSED CONSOLIDATED CASH FLOW DATA | ||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
NINE MONTHS ENDED: |
September 30, |
September 30, 2015 | ||||||||||||||||||||
Beginning cash |
$ |
825 |
$ |
4,108 |
||||||||||||||||||
Net cash provided by operating activities |
50 |
1,055 |
||||||||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||
Drilling and completion costs(a) |
(948) |
(2,696) |
||||||||||||||||||||
Acquisitions of proved and unproved properties(b) |
(583) |
(407) |
||||||||||||||||||||
Proceeds from divestitures of proved and unproved properties |
988 |
188 |
||||||||||||||||||||
Additions to other property and equipment(c) |
(32) |
(114) |
||||||||||||||||||||
Proceeds from sales of other property and equipment |
70 |
80 |
||||||||||||||||||||
Cash paid for title defects |
(69) |
— |
||||||||||||||||||||
Additions to investments |
— |
(1) |
||||||||||||||||||||
Decrease in restricted cash |
— |
52 |
||||||||||||||||||||
Other |
(5) |
(7) |
||||||||||||||||||||
Net cash used in investing activities |
(579) |
(2,905) |
||||||||||||||||||||
Net cash used in financing activities |
(292) |
(499) |
||||||||||||||||||||
Change in cash and cash equivalents |
(821) |
(2,349) |
||||||||||||||||||||
Ending cash |
$ |
4 |
$ |
1,759 |
||||||||||||||||||
(a) |
Includes capitalized interest of $5 million and $21 million for the nine months ended September 30, 2016 and 2015, respectively. | |||||||||||||||||||||
(b) |
Includes capitalized interest of $179 million and $305 million for the nine months ended September 30, 2016 and 2015, respectively. | |||||||||||||||||||||
(c) |
Includes capitalized interest of $1 million and $3 million for the nine months ended September 30, 2016 and 2015, respectively. |
CHESAPEAKE ENERGY CORPORATION | ||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
THREE MONTHS ENDED: |
September 30, 2016 | |||||||||||||||||||||||||||||||||||||
$ |
Shares(a) |
$/Share(c) (d) | ||||||||||||||||||||||||||||||||||||
Net loss available to common stockholders |
$ |
(1,197) |
777 |
$ |
(1.54) | |||||||||||||||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||
Unrealized gains on commodity derivatives |
(163) |
(0.21) | ||||||||||||||||||||||||||||||||||||
Unrealized losses on supply contract derivatives |
280 |
0.36 | ||||||||||||||||||||||||||||||||||||
Provision for legal contingencies |
8 |
0.01 | ||||||||||||||||||||||||||||||||||||
Impairment of oil and natural gas properties |
433 |
0.56 | ||||||||||||||||||||||||||||||||||||
Impairments of fixed assets and other |
751 |
0.97 | ||||||||||||||||||||||||||||||||||||
Gains on purchases or exchanges of debt |
(87) |
(0.11) | ||||||||||||||||||||||||||||||||||||
Other |
2 |
— | ||||||||||||||||||||||||||||||||||||
Tax effect of above items(b) |
— |
— | ||||||||||||||||||||||||||||||||||||
Adjusted net income available to common stockholders(c) (Non-GAAP) |
27 |
0.04 | ||||||||||||||||||||||||||||||||||||
Preferred stock dividends |
42 |
0.05 | ||||||||||||||||||||||||||||||||||||
Total adjusted net income attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
69 |
$ |
0.09 | ||||||||||||||||||||||||||||||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 113 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | |||||||||||||||||||||||||||||||||||||
(b) |
Our effective tax rate in the three months ended September 30, 2016 was 0%; thus, there is no tax effect on the reconciling adjustments. | |||||||||||||||||||||||||||||||||||||
(c) |
Adjusted net income and adjusted earnings per common share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | |||||||||||||||||||||||||||||||||||||
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | |||||||||||||||||||||||||||||||||||||
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | |||||||||||||||||||||||||||||||||||||
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | |||||||||||||||||||||||||||||||||||||
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | |||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
THREE MONTHS ENDED: |
September 30, 2015 | ||||||||||||||
$ |
Shares(a) |
$/Share(c) (d) | |||||||||||||
Net loss available to common stockholders |
$ |
(4,695) |
663 |
$ |
(7.08) |
||||||||||
Adjustments: |
|||||||||||||||
Unrealized losses on commodity derivatives |
67 |
0.10 |
|||||||||||||
Unrealized gains on supply contract derivatives |
(70) |
(0.10) |
|||||||||||||
Restructuring and other termination costs |
53 |
0.08 |
|||||||||||||
Impairment of oil and natural gas properties |
5,416 |
8.17 |
|||||||||||||
Impairments of fixed assets and other |
79 |
0.12 |
|||||||||||||
Net gains on sales of fixed assets |
(1) |
— |
|||||||||||||
Tax effect of above items(b) |
(932) |
(1.41) |
|||||||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
(83) |
(0.12) |
|||||||||||||
Preferred stock dividends |
43 |
0.06 |
|||||||||||||
Total adjusted net loss attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
(40) |
$ |
(0.06) |
|||||||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 113 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | ||||||||||||||
(b) |
Our effective tax rate in the three months ended September 30, 2015 was 16.8%. | ||||||||||||||
(c) |
Adjusted net income and adjusted earnings per common share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | ||||||||||||||
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | ||||||||||||||
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | ||||||||||||||
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | ||||||||||||||
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | |||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | |||||||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
NINE MONTHS ENDED: |
September 30, 2016 | ||||||||||||||||||||||
$ |
Shares(a) |
$/Share(c) (d) | |||||||||||||||||||||
Net loss available to common stockholders |
$ |
(3,953) |
722 |
$ |
(5.47) |
||||||||||||||||||
Adjustments: |
|||||||||||||||||||||||
Unrealized losses on commodity derivatives |
423 |
0.58 |
|||||||||||||||||||||
Unrealized losses on supply contract derivatives |
297 |
0.41 |
|||||||||||||||||||||
Restructuring and other termination costs |
3 |
— |
|||||||||||||||||||||
Provision for legal contingencies |
112 |
0.16 |
|||||||||||||||||||||
Impairment of oil and natural gas properties |
2,331 |
3.23 |
|||||||||||||||||||||
Impairments of fixed assets and other |
795 |
1.10 |
|||||||||||||||||||||
Net gains on sales of fixed assets |
(5) |
(0.01) |
|||||||||||||||||||||
Loss on sale of investment |
10 |
0.01 |
|||||||||||||||||||||
Gains on purchases or exchanges of debt |
(255) |
(0.35) |
|||||||||||||||||||||
Tax rate adjustment |
— |
— |
|||||||||||||||||||||
Other |
8 |
0.01 |
|||||||||||||||||||||
Tax effect of above items(b) |
— |
— |
|||||||||||||||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
(234) |
(0.33) |
|||||||||||||||||||||
Preferred stock dividends |
127 |
0.18 |
|||||||||||||||||||||
Total adjusted net loss attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
(107) |
$ |
(0.15) |
|||||||||||||||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 113 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | ||||||||||||||||||||||
(b) |
Our effective tax rate in the nine months ended September 30, 2016 was 0%; thus, there is no tax effect on the reconciling adjustments. | ||||||||||||||||||||||
(c) |
Adjusted net income and adjusted earnings per share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | ||||||||||||||||||||||
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | ||||||||||||||||||||||
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | ||||||||||||||||||||||
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | ||||||||||||||||||||||
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION |
|||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS |
|||||||||||||||||||||||
(in millions, except per share data) |
|||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||
NINE MONTHS ENDED: |
September 30, 2015 | ||||||||||||||||||||||
$ |
Shares(a) |
$/Share(c) (d) | |||||||||||||||||||||
Net loss available to common stockholders |
$ |
(12,628) |
662 |
$ |
(19.07) |
||||||||||||||||||
Adjustments: |
|||||||||||||||||||||||
Unrealized losses on commodity derivatives |
642 |
0.97 | |||||||||||||||||||||
Unrealized gains on supply contract derivatives |
(290) |
(0.44) | |||||||||||||||||||||
Restructuring and other termination costs |
39 |
0.06 | |||||||||||||||||||||
Provision for legal contingencies |
359 |
0.54 | |||||||||||||||||||||
Impairment of oil and natural gas properties |
15,407 |
23.27 | |||||||||||||||||||||
Impairments of fixed assets and other |
167 |
0.25 | |||||||||||||||||||||
Net losses on sales of fixed assets |
3 |
— | |||||||||||||||||||||
Tax rate adjustment |
(17) |
(0.02) | |||||||||||||||||||||
Other |
(17) |
(0.02) | |||||||||||||||||||||
Tax effect of above items(b) |
(3,827) |
(5.78) | |||||||||||||||||||||
Adjusted net loss available to common stockholders(c) (Non-GAAP) |
(162) |
(0.24) | |||||||||||||||||||||
Preferred stock dividends |
128 |
0.19 | |||||||||||||||||||||
Total adjusted net loss attributable to Chesapeake(c) (d) (Non-GAAP) |
$ |
(34) |
(0.05) | ||||||||||||||||||||
(a) |
Weighted average common and common equivalent shares outstanding do not include 115 million shares that were considered antidilutive for calculating earnings per share in accordance with GAAP. | ||||||||||||||||||||||
(b) |
Our effective tax rate in the nine months ended September 30, 2015 was 23.5%. | ||||||||||||||||||||||
(c) |
Adjusted net income and adjusted earnings per common share are not measures of financial performance under accounting principles generally accepted in the United States (GAAP), and should not be considered as an alternative to net income available to common stockholders or earnings per share. Adjusted net income available to common stockholders and adjusted earnings per share exclude certain items that management believes affect the comparability of operating results. The company believes these adjusted financial measures are a useful adjunct to earnings calculated in accordance with GAAP because: | ||||||||||||||||||||||
(i) |
Management uses adjusted net income available to common stockholders to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | ||||||||||||||||||||||
(ii) |
Adjusted net income available to common stockholders is more comparable to earnings estimates provided by securities analysts. | ||||||||||||||||||||||
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | ||||||||||||||||||||||
(d) |
We have revised our presentation of adjusted loss per share to exclude shares considered antidilutive when calculating earnings per share in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF OPERATING CASH FLOW AND EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
THREE MONTHS ENDED: |
September 30, 2016 |
September 30, 2015 | ||||||
CASH PROVIDED BY OPERATING ACTIVITIES |
$ |
376 |
$ |
318 |
||||
Changes in assets and liabilities |
(167) |
158 |
||||||
OPERATING CASH FLOW(a) |
$ |
209 |
$ |
476 |
THREE MONTHS ENDED: |
September 30, |
September 30, | ||||||
NET LOSS |
$ |
(1,154) |
$ |
(4,639) |
||||
Interest expense |
73 |
88 |
||||||
Income tax benefit |
— |
(937) |
||||||
Depreciation and amortization of other assets |
25 |
31 |
||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
255 |
488 |
||||||
EBITDA(b) |
$ |
(801) |
$ |
(4,969) |
THREE MONTHS ENDED: |
September 30, |
September 30, | |||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES |
$ |
376 |
$ |
318 |
|||||||||
Changes in assets and liabilities |
(167) |
158 |
|||||||||||
Interest expense, net of unrealized gains (losses) on derivatives |
71 |
86 |
|||||||||||
Gains on commodity derivatives, net |
129 |
227 |
|||||||||||
Gains (losses) on supply contract derivatives, net |
(134) |
70 |
|||||||||||
Cash receipts on commodity and supply contract derivative settlements, net |
(101) |
(223) |
|||||||||||
Amendment of natural gas gathering contract |
66 |
— |
|||||||||||
Stock-based compensation |
(15) |
(18) |
|||||||||||
Restructuring and other termination costs |
1 |
(53) |
|||||||||||
Provision for legal contingencies |
27 |
— |
|||||||||||
Impairment of oil and natural gas properties |
(433) |
(5,416) |
|||||||||||
Impairments of fixed assets and other |
(751) |
(79) |
|||||||||||
Net gains on sales of fixed assets |
— |
1 |
|||||||||||
Investment activity |
(1) |
(33) |
|||||||||||
Gains on purchases or exchanges of debt |
87 |
— |
|||||||||||
Other items |
44 |
(7) |
|||||||||||
EBITDA(b) |
$ |
(801) |
$ |
(4,969) |
|||||||||
(a) |
Operating cash flow represents net cash provided by operating activities before changes in assets and liabilities. Operating cash flow is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Operating cash flow is widely accepted as a financial indicator of an oil and natural gas company's ability to generate cash that is used to internally fund exploration and development activities and to service debt. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. Operating cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities as an indicator of cash flows, or as a measure of liquidity. | ||||||||||||
(b) |
Ebitda represents net income before interest expense, income taxes, and depreciation, depletion and amortization expense. Ebitda is presented as a supplemental financial measurement in the evaluation of our business. We believe that it provides additional information regarding our ability to meet our future debt service, capital expenditures and working capital requirements. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Ebitda is also a financial measurement that, with certain negotiated adjustments, is reported to our lenders pursuant to our bank credit agreements and is used in the financial covenants in our bank credit agreements. Ebitda is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations or cash flow provided by operating activities prepared in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF OPERATING CASH FLOW AND EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
NINE MONTHS ENDED: |
September 30, |
September 30, | ||||||
CASH PROVIDED BY OPERATING ACTIVITIES |
$ |
50 |
$ |
1,055 |
||||
Changes in assets and liabilities |
598 |
877 |
||||||
OPERATING CASH FLOW(a) |
$ |
648 |
$ |
1,932 |
NINE MONTHS ENDED: |
September 30, |
September 30, | ||||||
NET LOSS |
$ |
(3,825) |
$ |
(12,450) |
||||
Interest expense |
197 |
210 |
||||||
Income tax benefit |
— |
(3,814) |
||||||
Depreciation and amortization of other assets |
83 |
100 |
||||||
Oil, natural gas and NGL depreciation, depletion and amortization |
791 |
1,773 |
||||||
EBITDA(b) |
$ |
(2,754) |
$ |
(14,181) |
NINE MONTHS ENDED: |
September 30, |
September 30, | |||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES |
$ |
50 |
$ |
1,055 |
|||||||||
Changes in assets and liabilities |
598 |
877 |
|||||||||||
Interest expense, net of unrealized gains (losses) on derivatives |
190 |
218 |
|||||||||||
Gains (losses) on commodity derivatives, net |
(134) |
340 |
|||||||||||
Gains (losses) on supply contract derivatives, net |
(151) |
290 |
|||||||||||
Cash receipts on commodity and supply contract derivative settlements, net |
(487) |
(859) |
|||||||||||
Amendment of natural gas gathering contract |
66 |
— |
|||||||||||
Stock-based compensation |
(40) |
(61) |
|||||||||||
Restructuring and other termination costs |
(1) |
(39) |
|||||||||||
Provision for legal contingencies |
(77) |
(359) |
|||||||||||
Impairment of oil and natural gas properties |
(2,331) |
(15,407) |
|||||||||||
Impairments of fixed assets and other |
(785) |
(159) |
|||||||||||
Net gains (losses) on sales of fixed assets |
5 |
(3) |
|||||||||||
Investment activity |
(13) |
(57) |
|||||||||||
Gains on purchases or exchanges of debt |
255 |
— |
|||||||||||
Other items |
101 |
(17) |
|||||||||||
EBITDA(b) |
$ |
(2,754) |
$ |
(14,181) |
|||||||||
(a) |
Operating cash flow represents net cash provided by operating activities before changes in assets and liabilities. Operating cash flow is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Operating cash flow is widely accepted as a financial indicator of an oil and natural gas company's ability to generate cash that is used to internally fund exploration and development activities and to service debt. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. Operating cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities as an indicator of cash flows, or as a measure of liquidity. | ||||||||||||
(b) |
Ebitda represents net income before interest expense, income taxes, and depreciation, depletion and amortization expense. Ebitda is presented as a supplemental financial measurement in the evaluation of our business. We believe that it provides additional information regarding our ability to meet our future debt service, capital expenditures and working capital requirements. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Ebitda is also a financial measurement that, with certain negotiated adjustments, is reported to our lenders pursuant to our bank credit agreements and is used in the financial covenants in our bank credit agreements. Ebitda is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations or cash flow provided by operating activities prepared in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION | ||||||||
RECONCILIATION OF ADJUSTED EBITDA | ||||||||
($ in millions) | ||||||||
(unaudited) | ||||||||
THREE MONTHS ENDED: |
September 30, |
September 30, | ||||||
EBITDA |
$ |
(801) |
$ |
(4,969) |
||||
Adjustments: |
||||||||
Unrealized (gains) losses on commodity derivatives |
(163) |
67 |
||||||
Unrealized (gains) losses on supply contract derivatives |
280 |
(70) |
||||||
Restructuring and other termination costs |
— |
53 |
||||||
Provision for legal contingencies |
8 |
— |
||||||
Impairment of oil and natural gas properties |
433 |
5,416 |
||||||
Impairments of fixed assets and other |
751 |
79 |
||||||
Net gains on sales of fixed assets |
— |
(1) |
||||||
Gains on purchases or exchanges of debt |
(87) |
— |
||||||
Net income attributable to noncontrolling interests |
(1) |
(13) |
||||||
Other |
1 |
(2) |
||||||
Adjusted EBITDA(a) |
$ |
421 |
$ |
560 |
CHESAPEAKE ENERGY CORPORATION | |||||||||||||
RECONCILIATION OF ADJUSTED EBITDA | |||||||||||||
($ in millions) | |||||||||||||
(unaudited) | |||||||||||||
NINE MONTHS ENDED: |
September 30, |
September 30, | |||||||||||
EBITDA |
$ |
(2,754) |
$ |
(14,181) |
|||||||||
Adjustments: |
|||||||||||||
Unrealized losses on commodity derivatives |
423 |
642 |
|||||||||||
Unrealized (gains) losses on supply contract derivatives |
297 |
(290) |
|||||||||||
Restructuring and other termination costs |
3 |
39 |
|||||||||||
Provision for legal contingencies |
112 |
359 |
|||||||||||
Impairment of oil and natural gas properties |
2,331 |
15,407 |
|||||||||||
Impairments of fixed assets and other |
795 |
167 |
|||||||||||
Net (gains) losses on sales of fixed assets |
(5) |
3 |
|||||||||||
Loss on sale of investment |
10 |
— |
|||||||||||
Gains on purchases or exchanges of debt |
(255) |
— |
|||||||||||
Net income attributable to noncontrolling interests |
(1) |
(50) |
|||||||||||
Other |
(1) |
(9) |
|||||||||||
Adjusted EBITDA(a) |
$ |
955 |
$ |
2,087 |
|||||||||
(a) |
Adjusted ebitda excludes certain items that management believes affect the comparability of operating results. The company believes these non-GAAP financial measures are a useful adjunct to ebitda because: | ||||||||||||
(i) |
Management uses adjusted ebitda to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. | ||||||||||||
(ii) |
Adjusted ebitda is more comparable to estimates provided by securities analysts. | ||||||||||||
(iii) |
Items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items. | ||||||||||||
Accordingly, adjusted EBITDA should not be considered as a substitute for net income, income from operations or cash flow provided by operating activities prepared in accordance with GAAP. |
CHESAPEAKE ENERGY CORPORATION
RECONCILIATION OF PV-9 AND PV-10 TO STANDARDIZED MEASURE
($ in millions)
(unaudited)
PV-9 is a non-GAAP metric used in the determination of the value of collateral under Chesapeake's credit facility. PV-10 is a non-GAAP metric used by the industry, investors and analysts to estimate the present value, discounted at 10% per annum, of estimated future cash flows of the company's estimated proved reserves before income tax and asset retirement obligations. The following table shows the reconciliation of PV-9 and PV-10 to the company's standardized measure of discounted future net cash flows, the most directly comparable GAAP measure, for the year ended December 31, 2015 and for the interim period ended September 30, 2016. Management believes that PV-9 provides useful information to investors regarding the company's collateral position and that PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, management believes the use of a pre-tax measure is valuable for evaluating the company. Neither PV-9 nor PV-10 should be considered as an alternative to the standardized measure of discounted future net cash flows as computed under GAAP. With respect to PV-9 and PV-10 calculated as of an interim date, it is not practical to calculate taxes for the related interim period because GAAP does not provide for disclosure of standardized measure on an interim basis.
PV-9 – September 30, 2016 @ NYMEX Strip |
$ |
11,847 |
|
Less: Change in discount factor from 9 to 10 |
(743) |
||
PV-10 – September 30, 2016 @ NYMEX Strip |
11,104 |
||
Less: Change in pricing assumption from NYMEX Strip to SEC |
(7,284) |
||
PV-10 – September 30, 2016 @ SEC |
3,820 |
||
Plus: Change in PV-10 from 12/31/15 to 9/30/16 |
908 |
||
PV-10 – December 31, 2015 @ SEC |
4,728 |
||
Less: Present value of future income tax discounted at 10% |
(34) |
||
Standardized measure of discounted future cash flows – December 31, 2015 |
$ |
4,694 |
CHESAPEAKE ENERGY CORPORATION
MANAGEMENT'S OUTLOOK AS OF NOVEMBER 3, 2016
Chesapeake periodically provides guidance on certain factors that affect the company's future financial performance. Changes from the company's August 9, 2016 Outlook are italicized bold below.
Year Ending | ||||||
Adjusted Production Growth(a) |
0% to 3% | |||||
Absolute Production |
||||||
Liquids - mmbbls |
56 - 60 | |||||
Oil - mmbbls |
33 - 35 | |||||
NGL - mmbbls |
23 - 25 | |||||
Natural gas - bcf |
1,020 - 1,040 | |||||
Total absolute production - mmboe |
226 - 233 | |||||
Absolute daily rate - mboe |
617 - 637 | |||||
Estimated Realized Hedging Effects(b) (based on 11/1/16 strip prices): |
||||||
Oil - $/bbl |
$3.13 | |||||
Natural gas - $/mcf |
$0.16 | |||||
NGL - $/bbl |
($0.33) | |||||
Estimated Basis to NYMEX Prices: |
||||||
Oil - $/bbl |
$2.55 - $2.65 | |||||
Natural gas - $/mcf |
$0.35 - $0.45 | |||||
NGL - $/bbl |
$4.80 - $5.00 | |||||
Operating Costs per Boe of Projected Production: |
||||||
Production expense |
$3.00 - $3.20 | |||||
Gathering, processing and transportation expenses |
$7.60 - $8.10 | |||||
Oil - $/bbl |
$3.75 - $3.95 | |||||
Natural Gas - $/mcf |
$1.40 - $1.50 | |||||
NGL - $/bbl |
$7.60 - $7.85 | |||||
Production taxes |
$0.35 - $0.45 | |||||
General and administrative(c) |
$0.80 - $0.90 | |||||
Stock-based compensation (noncash) |
$0.10 - $0.20 | |||||
DD&A of natural gas and liquids assets |
$3.50 - $4.50 | |||||
Depreciation of other assets |
$0.40 - $0.50 | |||||
Interest expense(d) |
$1.20 - $1.30 | |||||
Marketing, gathering and compression net margin(e) |
$90 - $100 | |||||
Book Tax Rate |
0% | |||||
Capital Expenditures ($ in millions)(f) |
$1,400 - $1,500 | |||||
Capitalized Interest ($ in millions) |
$250 | |||||
Total Capital Expenditures ($ in millions) |
$1,650 - $1,750 | |||||
(a) |
Based on 2015 production of 550 mboe per day, adjusted for 2015 and 2016 sales. | |||||
(b) |
Includes expected settlements for commodity derivatives adjusted for option premiums. For derivatives closed early, settlements are reflected in the period of original contract expiration. | |||||
(c) |
Excludes expenses associated with stock-based compensation. | |||||
(d) |
Excludes unrealized gains (losses) on interest rate derivatives. | |||||
(e) |
Includes revenue and operating expenses. Excludes depreciation and amortization of other assets and unrealized gains (losses) on supply contract derivatives. | |||||
(f) |
Includes capital expenditures for drilling and completion, leasehold, geological and geophysical costs, rig termination payments and other property and plant and equipment. Excludes approximately $259 million for the repurchase of overriding royalty interests associated with the sale of certain of the company's properties and any additional proved property acquisitions. |
CHESAPEAKE ENERGY CORPORATION
MANAGEMENT'S PRELIMINARY OUTLOOK FOR 2017 AS OF NOVEMBER 3, 2016
Chesapeake periodically provides guidance on certain factors that affect the company's future financial performance. Changes from the company's August 9, 2016 Outlook are italicized bold below.
Year Ending 12/31/2017 | ||||||
Adjusted Production Growth(a) |
(5%) to 0% | |||||
Absolute Production |
||||||
Liquids - mmbbls |
51 - 55 | |||||
Oil - mmbbls |
33 - 35 | |||||
NGL - mmbbls |
18 - 20 | |||||
Natural gas - bcf |
860 - 900 | |||||
Total absolute production - mmboe |
194 - 205 | |||||
Absolute daily rate - mboe |
532 - 562 | |||||
Operating Costs per Boe of Projected Production: |
||||||
Production expense, production taxes and general and administrative expenses(b) |
$4.00 - $4.50 | |||||
Gathering, processing and transportation expenses |
$7.00 - $7.50 | |||||
Oil - $/bbl |
$4.25 - $4.45 | |||||
Natural Gas - $/mcf |
$1.25 - $1.35 | |||||
NGL - $/bbl |
$8.10 - $8.30 | |||||
Marketing, gathering and compression net margin(c) |
($80) - ($60) | |||||
Capital Expenditures ($ in millions)(d) |
$1,600 - $2,400 | |||||
Capitalized Interest ($ in millions) |
$220 | |||||
Total Capital Expenditures ($ in millions) |
$1,820 - $2,620 | |||||
(a) |
Based on 2016 production of 548 mboe per day, adjusted for 2016 sales. | |||||
(b) |
Includes expenses associated with stock-based compensation. | |||||
(c) |
Includes revenue and operating expenses. Excludes depreciation and amortization of other assets. | |||||
(d) |
Includes capital expenditures for drilling and completion, leasehold, geological and geophysical costs, rig termination payments and other property and plant and equipment. |
Oil, Natural Gas and Natural Gas Liquids Hedging Activities
Chesapeake enters into commodity derivative transactions in order to mitigate a portion of its exposure to adverse changes in market prices. Please see the quarterly reports on Form 10-Q and annual reports on Form 10-K filed by Chesapeake with the SEC for detailed information about derivative instruments the company uses, its quarter-end derivative positions and accounting for oil, natural gas and natural gas liquids derivatives.
As of November 1, 2016, the company had downside protection, through open swaps, on a portion of its remaining 2016 oil production at an average price of $46.84 per bbl. The company had downside price protection, through open swaps and two-way collars, on a portion of its remaining 2016 natural gas production at an average price of $2.86 per mcf. Chesapeake also had downside price protection, through open swaps, on a portion of its remaining 2016 ethane and propane production at an average price of $0.17 per gallon and $0.46 per gallon, respectively. In addition, the company had downside protection, through open swaps, on a portion of its 2017 oil production at an average price of $49.68 per bbl. The company had downside price protection, through open swaps and two-way collars, on a portion of its 2017 natural gas production at an average price of $3.07 per mcf.
The company's crude oil hedging positions as of November 1, 2016 were as follows:
Open Crude Oil Swaps; Gains from Closed | |||||||||
Crude Oil Trades and Call Option Premiums | |||||||||
Open Swaps (mbbls) |
Avg. NYMEX Price of Open Swaps |
Total Gains from Closed Trades and Premiums for Call Options ($ in millions) | |||||||
Q4 2016 (a) |
6,072 |
$ |
46.84 |
$ |
10 |
||||
Q1 2017 |
4,500 |
$ |
49.47 |
$ |
22 |
||||
Q2 2017 |
4,550 |
$ |
49.61 |
23 |
|||||
Q3 2017 |
4,232 |
$ |
49.77 |
23 |
|||||
Q4 2017 |
4,232 |
$ |
49.89 |
23 |
|||||
Total 2017 |
17,514 |
$ |
49.68 |
$ |
91 |
||||
Total 2018 – 2022 |
$ |
(13) |
|||||||
(a) |
Certain hedging arrangements include a sold option to extend at an average price of $53.67 per bbl covering 0.7 mmbbls in 2016. Sold options are included with net written call options. |
Crude Oil Net Written Call Options | ||||
Call Options (mbbls) |
Avg. NYMEX Strike Price | |||
Q4 2016 |
3,489 |
$ |
87.25 |
|
Q1 2017 |
1,305 |
$ |
83.50 |
|
Q2 2017 |
1,320 |
$ |
83.50 |
|
Q3 2017 |
1,334 |
$ |
83.50 |
|
Q4 2017 |
1,334 |
$ |
83.50 |
|
Total 2017 |
5,293 |
$ |
83.50 |
The company's natural gas hedging positions as of November 1, 2016 were as follows:
Open Natural Gas Swaps; Losses from Closed | |||||||||
Natural Gas Trades and Call Option Premiums | |||||||||
Open Swaps (bcf) |
Avg. NYMEX Price of Open Swaps |
Total Losses from Closed Trades and Premiums for Call Options ($ in millions) | |||||||
Q4 2016 (a) |
155 |
$ |
2.85 |
$ |
(28) |
||||
Q1 2017 |
134 |
$ |
3.23 |
$ |
(3) |
||||
Q2 2017 |
135 |
$ |
2.95 |
(1) |
|||||
Q3 2017 |
136 |
$ |
3.00 |
(2) |
|||||
Q4 2017 |
129 |
$ |
3.10 |
(3) |
|||||
Total 2017 |
534 |
$ |
3.07 |
$ |
(9) |
||||
Total 2018 – 2022 |
51 |
$ |
2.97 |
$ |
(69) |
||||
(a) |
Certain hedging arrangements include a sold option to extend at an average price of $2.80 per mmbtu covering 26 bcf in 2016. Sold options are included with net written call options. |
Natural Gas Two-Way Collars | |||||||
Open Collars (bcf) |
Avg. NYMEX Bought Put Price |
Avg. NYMEX Sold Call Price | |||||
Q4 2016 |
15 |
$ |
3.00 |
$ |
3.48 |
||
Q1 2017 |
23 |
$ |
3.00 |
$ |
3.48 |
Natural Gas Net Written Call Options | ||||
Call Options (bcf) |
Avg. NYMEX Strike Price | |||
Q4 2016 |
46 |
$ |
5.27 |
|
Q1 2017 |
12 |
$ |
9.43 |
|
Q2 2017 |
12 |
$ |
9.43 |
|
Q3 2017 |
12 |
$ |
9.43 |
|
Q4 2017 |
12 |
$ |
9.43 |
|
Total 2017 |
48 |
$ |
9.43 |
|
Total 2018 – 2022 |
66 |
$ |
12.00 |
Natural Gas Basis Protection Swaps | ||||
Volume (bcf) |
Avg. NYMEX plus/(minus) | |||
Q4 2016 |
12 |
$ |
0.05 |
|
Q1 2017 |
13 |
$ |
0.35 |
|
Q2 2017 |
6 |
$ |
(0.46) |
|
Q3 2017 |
6 |
$ |
(0.46) |
|
Q4 2017 |
6 |
$ |
(0.46) |
|
Total 2017 |
31 |
$ |
(0.11) |
|
Total 2018 - 2022 |
1 |
$ |
(0.98) |
The company's natural gas liquids hedging positions as of November 1, 2016 were as follows:
Open Ethane Swaps | ||||
Volume (mmgal) |
Avg. NYMEX Price of Open Swaps | |||
Q4 2016 |
20 |
$ |
0.17 |
Open Propane Swaps | ||||
Volume (mmgal) |
Avg. NYMEX Price of Open Swaps | |||
Q4 2016 |
17 |
$ |
0.46 |
SOURCE Chesapeake Energy Corporation
PHILADELPHIA, Sept. 15, 2016 /PRNewswire/ -- Renmatix, the leader in affordable cellulosic sugars, today announced a $14M investment, led by Bill Gates.
Industry demand for competitive alternatives to petro-derived molecules is gaining traction, despite recent market pressures. In the interest of expanding that supply, the Plantrose® process provides an enabling technology for profitable biorefineries. This investment in commercializing Plantrose will help drive towards the first wave of Renmatix licensees building Plantrose-enabled biorefineries in diverse global markets like Canada, India, Malaysia, the U.S. and elsewhere. In parallel, that activity will facilitate further market development in downstream bioproduct applications.
According to Gates, "To effectively address climate change, we need to develop an energy infrastructure that doesn't emit greenhouse gas and is cost competitive. A critical component in this effort must be to decarbonize the industrial sector. Another is the possibility of cost competitive biofuels. Renmatix provides an innovative process that is an exciting pathway to pursue."
Gates is joined in the round by Total (NYSE: TOT), the global energy major which, after an initial investment in 2015, has expanded its investment and has additionally signed a licensing agreement with Renmatix for 1M tons of annual cellulosic sugar production capacity, at Total's discretion to build corresponding facilities. The license represents significant revenue potential for Renmatix, extending over the lifetime of the agreement.
"At Total, our ambition is to become the responsible energy major. We want to make low-carbon businesses a profitable growth driver accounting for 20% of our portfolio in 20 years' time. Meeting these goals is what has led to setting-up and expanding our collaboration with Renmatix," said Patrick Pouyanné, Chairman and CEO of Total.
The patented Plantrose process uses supercritical water to reduce costs in conversion of biomass to cellulosic sugars, the critical intermediary for second-generation biochemicals and biofuels. With faster reactions and virtually no associated consumable-expenses, Renmatix's supercritical hydrolysis economically enables a multitude of renewable process technologies to access the market for 'high volume, low cost, broadly sourced' cellulosic sugars that is compounding today. From this well established foundation in industrial sugars, the company continues to expand its product portfolio by valorizing additional bio building block intermediates, including Omno® polymers and crystalline cellulose.
"This continued progress marks the pronounced acceleration of a new, sugar based, chemistry regime. One that can go beyond conventional oil based products for cleaner, more sustainable solutions," said Renmatix CEO, Mike Hamilton. "While we're working with partners to capitalize on the vast opportunity for biobased transformation in markets as diverse as the U.S. and India, this investment from Gates and Total together – shows recognition of our technological achievements, and magnifies our commercial momentum. That acknowledgment and Total's signing of the million-ton license, are compelling indicators of our Plantrose technology's maturation towards biorefinery scale."
About Renmatix
Renmatix is the leading technology licensor for the conversion of biomass into cellulosic sugar, an enabling feedstock for petroleum alternatives used in the global biochemical and biofuels markets. The company's proprietary Plantrose process challenges conventional sugar economics by cheaply converting cellulosic biomass – from wood waste to agricultural residue – into useful, cost-effective Plantro® sugars and additional bio building blocks. Plantrose supercritical hydrolysis technology deconstructs non-food biomass an order of magnitude faster than other processes, and enhances its cost advantage by using no significant consumables. Renmatix is privately held, with a world-class technical center in Pennsylvania, a Feedstock Processing Facility (FPF) in New York, and production operations at the Integrated Plantrose Complex (IPC) in Georgia. renmatix.com
Contact
Duncan Cross
Vice President, Corporate Development
Renmatix
renmatix@missionc2.com
Photo - http://photos.prnewswire.com/prnh/20160913/407416-INFO
SOURCE Renmatix
SAN JOSE, Calif., July 7, 2016 /PRNewswire/ --SunPower Corp. (Nasdaq: SPWR) announced today that it was selected to provide 39.1 megawatts of solar photovoltaic technology under the French government's tender for supplying the country's ZNI (non-interconnected zones) with renewable energy and storage. SunPower secured 27 out of the total of 33 awards, or 76 percent, under the tender program. As part of its award, SunPower developed and will design and build five solar power installations in Corsica and the French West Indies, which will include battery storage technology.
"SunPower applauds the French government for promoting solar power development in the ZNI, and its forward-thinking approach to integrating battery storage with these projects to provide a more resilient, reliable and sustainable utility grid infrastructure," said SunPower Executive Vice President Eduardo Medina. "With experience deploying more than six gigawatts of solar technology around the world, SunPower is committed to working with our customers to deliver the most innovative, high performance solutions to maximize long-term energy output, cost-effectively and sustainably."
SunPower was selected to supply 20.7 megawatts of its high efficiency solar panels, the world's first and only direct current solar panels to achieve the Cradle to Cradle Certified™ Silver designation for sustainable practices used in manufacturing. In addition, the company will design and build five development projects, totaling 18.4 megawatts of solar with battery storage. All of the projects are expected to be operational by mid-year 2019.
In Corsica, SunPower will build two solar power plants of approximately five megawatts each, and one 1.5-megawatt rooftop solar power system. All three projects, totaling 11.3 megawatts, are being developed in partnership with Corsica Sole.
SunPower will build two solar power plant projects on disturbed lands in the French West Indies, including a four-megawatt system at a refinery in Martinique and a three-megawatt system at a quarry in Guadeloupe.
SunPower, an affiliate of Total (CAC: TOTF.PA), operates facilities in De Vernejoul and Toulouse, France, where it sustainably manufactures high efficiency solar panels for the European market and beyond. The company has more than 2.5 gigawatts of solar power plants operating or under contract around the world.
About SunPower
As one of the world's most innovative and sustainable energy companies, SunPower (Nasdaq: SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower's more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding expected project timelines and projected energy output. These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: challenges inherent in constructing and maintaining certain of our large projects, and fluctuations or declines in the performance of our solar panels and other products and solutions. A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or on the SEC Filings section of our Investor Relations website at investors.sunpowercorp.com. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.
©2016 SunPower Corporation. All Rights Reserved. SUNPOWER and the SUNPOWER logo are registered trademarks of SunPower Corporation in the U.S. and other countries as well.
Logo - http://photos.prnewswire.com/prnh/20150713/235415LOGO
SOURCE SunPower Corp.
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TotalEnergies
Nigeria LNG Terminal Expansion (Bonny Island) (subscriber access)
Status: (subscriber access)
Parent Entities:
Nigeria LNG Ltd.
North Platte Offshore Development (subscriber access)
Status: (subscriber access)
Parent Entities:
Cobalt International Energy, Inc
Total E&P USA
Permian Global Access Pipeline (PGAP) (subscriber access)
Status: (subscriber access)
Parent Entities:
Tellurian Inc.
Sohar LNG Bunkering Terminal (SLNGB) (subscriber access)
Status: (subscriber access)
Parent Entities:
Marsa LNG
Soyo LNG Export Terminal (subscriber access)
Status: (subscriber access)
Parent Entities:
Soyo LNG Consortium
Tahiti Vertical Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Chevron Corporation
Total E&P USA
Equinor ASA
Total Houston Solar + Battery Project - 1 (subscriber access)
Status: (subscriber access)
Parent Entities:
TotalEnergies
Total Houston Solar + Battery Project - 2 (subscriber access)
Status: (subscriber access)
Parent Entities:
TotalEnergies
Total Houston Solar + Battery Project - 3 (subscriber access)
Status: (subscriber access)
Parent Entities:
TotalEnergies
Total Houston Solar + Battery Project - 4 (subscriber access)
Status: (subscriber access)
Parent Entities:
TotalEnergies
Total Oman LNG Export Project (subscriber access)
Status: (subscriber access)
Parent Entities:
TotalEnergies
TotalEnergies Begonia Development Project (subscriber access)
Parent Entities:
TotalEnergies
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