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.
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