Two days after Aubrey McClendon announced he would step down as Chesapeake Energy's (OTC:CHKA.Q) CEO, the stock rose 6.2%. Clearly investors were excited to see the leadership change, along with other shakeups. To date, though, Chesapeake is up over 45%, and investors should be thanking former Anadarko Petroleum Corporation (NYSE:APC) executive Doug Lawler for the increase.

A lean, cost-cutting machine
Upon taking office, Lawler did not wait to get comfy in his new role. He took the bull by the horns and made his intentions clear: refocus an over-extended firm. And, his actions were swift. Lawler quickly cut the pork, including 10% of Chesapeake's entire workforce, including many corporate employees. Additionally, Lawler ensured Chesapeake focused on its core business by selling over $4 billion in assets that he deemed excessive. With these two tasks behind him, Lawler is preparing for long-term growth.

The stage is still being set
In addition to the above measures, Chesapeake's third quarter conference call revealed that average production expenses during the quarter decreased 10% year over year while general and administrative expenses decreased 12%. Additionally, because Lawler is emphasizing efficient, productive operations, Chesapeake spud 18.9% less gross wells and completed 21.7% less gross wells compared to its second quarter of 2013. Remarkably, though, Chesapeake's production is strong and shows signs of additional growth.

Chesapeake's daily production for the third quarter averaged approximately 4 billion cubic feet of natural gas equivalent (bcfe), a 2% decline from the third quarter of 2012, while its second quarter approximate average production was 4.1 bcfe. Additionally, Chesapeake's oil production surged 23% year over year.

So, even with massive asset sales and steep cost-cutting measures, Chesapeake's production levels are nearly equal, quite a feat.

Chesapeake's future: income and cash
Cash is a necessity for the capital intensive exploration and production industry while many investors often look to the bottom line for comfort. Both are looking good. Chesapeake reported an adjusted EBITDA of $1.325 billion, a 29% increase year over year while its operating cash flow is up 22% year over year. Additionally, adjusted net income to common shareholders is $0.43 per fully diluted share, up $0.33 from the third quarter of 2012.

Competitor Range Resources' (NYSE:RRC) third quarter report seemingly mirror some Chesapeake's results. Range's adjusted cash flow surged 29% compared to the third quarter of 2012 while its unit costs were cut by 12% in the same period of time. Coupling this information with a 75% increase in income and Range's 21% increase in production reveals that it is on a fast-track to new heights. Under Lawler's continued leadership and now that Chesapeake is focusing on productive wells, Range's results may be foreshadowing Chesapeake's future.

Lawler's former employer, Anadarko Petroleum, is also making headwinds but not all of them are positive. Anadarko's profit per share is $0.36, up 33% from the third quarter of 2012 while its revenue rose 16%. Interestingly, Anadarko's shares traded lower after the earnings call.   So, analysts may be stepping back to reassess the situation. But, Anadarko's operational plan is geared toward the long term. It increased its U.S. onshore sales volume by nearly 61,000 barrels of oil equivalent per day compared to the third quarter of 2012 while further expanding into the lucrative Eagle Ford play in Texas.

Additionally, Anadarko successfully drilled two appraisal wells in Mozambique that could prove to be quite fruitful. And, it increased its stake in the Coronado discovery within the Gulf of Mexico by increasing its stake form 15%-35%; it will begin operating after the next appraisal well is drilled.

Jump on the bandwagon
The third quarter conference call was further evidence that exploration and production companies, notably Chesapeake Energy, are positioning themselves for the long-haul. With the recent tailwinds and the successful implementation of refocusing strategies, Doug Lawler is positioned to take Chesapeake to the next level.