Natural-gas and oil producer Chesapeake Energy Corp. on Thursday swung to a first-quarter loss because of commodity and interest-rate hedges and said it plans to sell two sets of natural-gas holdings.
For the three months ended March 31, the company reported a loss of $132 million, or 29 cents per share, compared with a profit of $258 million, or 50 cents per share, during the same period a year earlier.
The most recent quarter included a $704 million book loss tied to the value of natural-gas and oil futures and interest-rate hedges. Chesapeake said the loss was partially offset by $132 million in other hedging gains. Excluding those items, the company said net income to common shareholders would have been $561 million, or $1.09 per share.
Analysts predicted the company would earn 93 cents per share, on average, according to Thomson Financial. Those forecasts typically exclude one-time items.
Revenue rose to $1.61 billion from $1.58 billion. Analysts predicted revenue of $2.12 billion, according to Thomson.
The company said it produced the equivalent of 2.2 million cubic feet of gas per day during the quarter, up from 1.7 million a year before.
Chesapeake said it agreed to sell the equivalent of 94 billion cubic feet worth of older gas reserves in Texas, Oklahoma and Kansas for proceeds of $623 million.
The company also said it plans to sell its Arkoma Basin Woodford Shale properties in Oklahoma, and has hired Meagher Oil & Gas Properties Inc. to help with the divestiture.
The sites, which total about 85,000 acres, produce the equivalent of 40 million cubic feet of gas per day and are estimated to hold more than the equivalent of 2 trillion cubic feet of potential reserves. The company estimates it can fetch more than $1.5 billion for the sites, which it hopes to sell by the middle of the year.
Chesapeake shares rose 31 cents to $51.22 in after-hours trading, partially reversing a slide of 77 cents to $50.93 during the regular session.
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