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Chesapeake Energy Corp. First Quarter 2022 Results

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   |    Friday,May 13,2022

Chesapeake Energy Corp. reported 2022 first quarter financial and operating results.

Highlights include:

• Net cash provided by operating activities of $853 million
• Delivered $532 million in adjusted free cash flow⁽¹⁾, the highest quarterly amount in company history
• Net loss totaled $764 million, or $6.32 per diluted share; adjusted net income⁽¹⁾ of $436 million, or $3.09 per diluted share
• Adjusted EBITDAX⁽¹⁾ of $913 million
• Quarterly dividend of $2.34 per common share, consisting of a variable dividend of $1.84 per common share and a quarterly base dividend of $0.50 per common share, payable June 2, 2022 to shareholders of record at the close of business on May 19, 2022
• Initiated share repurchase program, retiring $83 million of common shares in the first quarter; anticipate pursuing additional repurchases in the second quarter and beyond
• Increased 2022 adjusted EBITDAX guidance to $4.6 – $4.8 billion (previous range $3.8 – $4.0 billion)
• Increased 2022 adjusted free cash flow to $2.6 – $2.8 billion (previous range $1.9 – $2.1 billion)

Nick Dell'Osso, Chesapeake's President and Chief Executive Officer, commented, "Momentum continues to build for Chesapeake as we execute our returns-focused strategy. We delivered record quarterly adjusted free cash flow, initiated our $1 billion share and warrant repurchase program and continued realizing the synergies anticipated from the Vine transaction, which we look forward to replicating with our recently closed Chief assets. We have updated our annual guidance, increasing the midpoint of our adjusted free cash flow projection, and further enhancing our ability to execute our capital return framework. Importantly, as recent events bring the focus of energy security back to the forefront of policy discussions across the globe, Chesapeake remains uniquely positioned to deliver reliable, affordable and lower carbon energy the world desperately needs."

Dividend Update

During the first quarter of 2022, Chesapeake generated $853 million of operating cash flow and had $19 million of cash on hand at quarter-end. Consistent with the company's cash return framework, Chesapeake plans to pay its base and variable dividend on June 2, 2022 to shareholders of record at the close of business on May 19, 2022.

Operations Update

Chesapeake's net production rate in the first quarter of 2022 was approximately 620,000 boe per day (approximately 87% natural gas and 13% total liquids), utilizing an average of 13 rigs to drill 41 wells and place 43 wells on production.

On March 9, 2022, Chesapeake closed its previously announced acquisition of Chief E&D Holdings, LP and affiliates of Tug Hill, Inc. Chesapeake expects the integration of the Chief and Tug Hill assets into its legacy Marcellus Shale operations to be largely completed by the third quarter of 2022. Additionally, on March 25, 2022, Chesapeake closed its previously announced sale of its Powder River Basin asset.

Chesapeake plans to host an Analyst Day on its Oklahoma City campus in the Fall of 2022 to provide additional details regarding its assets, operations and long-term outlook.