Shale oil producers Chesapeake Energy Corp. and Devon Energy Corp. on Nov. 2 topped Wall Street earnings estimates, as energy demand recovered from the pandemic slump and prices hit multiyear highs.
Chesapeake Energy’s third-quarter adjusted net income was $269 million, or $2.38 per share, topping forecasts of $1.68 per share, according to Refinitiv IBES. Devon reported adjusted net income of $733 million, or $1.08 per share, beating expectations of 93 cents a share, according to IBES data.
Producers are benefiting from a run-up in oil and natural gas prices, as the market rebounds from blistering losses during the pandemic. WTI futures are trading around $84/bbl—a level not seen since 2014, while Henry Hub natural gas futures are around $5.53 per MMBtu, near a seven-year high.
Despite soaring prices, most publicly traded energy companies have vowed to focus on shareholder returns over increasing production. On Nov. 2, Chesapeake and Devon said they anticipated full-year output at or above the upper end of their forecasts, while spending would remain within anticipated ranges.
Devon on Nov. 2 also said its board had authorized a $1 billion share-repurchase program, which represents 4% of its market cap.
Shares of Devon were up 5.5% in after-hours trading to $44.30, while Chesapeake rose 2.14% to $66.77.
Devon said its 2021 production and capital spending would come in at the upper end of its guidance range. Its third-quarter production averaged 608,000 boe/d and the company said it anticipates production next year in the range of 570,000 to 600,000 boe/d.
Chesapeake forecast 2021 adjusted EBITDAX, which excludes exploration expenses, of $2.1 billion to $2.2 billion, up from $1.8 billion to $1.9 billion previously, and increase its total production while holding capital spending steady.
Meanwhile, rival Comstock Resources slightly missed Wall Street estimates, reporting adjusted net income of $91 million, or 34 cents a share, versus estimates of 35 cents a share, according to IBES.
Recommended Reading
NOV Announces $1B Repurchase Program, Ups Dividend
2024-04-26 - NOV expects to increase its quarterly cash dividend on its common stock by 50% to $0.075 per share from $0.05 per share.
Repsol to Drop Marcellus Rig in June
2024-04-26 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.
US Drillers Cut Most Oil Rigs in a Week Since November
2024-04-26 - The number of oil rigs fell by five to 506 this week, while gas rigs fell by one to 105, their lowest since December 2021.
CNX, Appalachia Peers Defer Completions as NatGas Prices Languish
2024-04-25 - Henry Hub blues: CNX Resources and other Appalachia producers are slashing production and deferring well completions as natural gas spot prices hover near record lows.
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.