Chesapeake Energy Corporation (NYSE:CHK) reported additional details of its FY2017 guidance outlook. The highlights comprised estimated total capital expenditures forecast of $1.9 billion to $2.5 billion, counting capitalized interest. Estimated total firm production guidance moving from a drop of 3% to increase of 2%. Exit rate oil production predicted to grow by 10% in FY2017, whereas exit rate gas production estimated to remain comparatively flat, adjusted for property sales
Chesapeake intends to operate an average of almost 17 drilling rigs, as against 10 rigs in FY2016. Doug Lawler, the Chief Executive Officer, reported that the implementation of 2017 capital plan will position company for significant earnings and production growth and funds flow neutrality in FY2018.
As noted during October 2016 Analyst Day, the 2017 capital plan is led by enhanced profitability and capital efficiencies from notable portfolio of high return rate of drilling opportunities. They will maintain operational and financial flexibility with a continuous focus on leading differential performance. The company look forward to establishing on their progress, both operationally and financially, in 2017 and beyond.
Chesapeake is budgeting total capital expenditures including capitalized interest in the range of $1.9 billion to $2.5 billion in 2017, as against total capital expenditures of almost $1.65 billion to $1.75 billion in 2016, discounting 2016 proved property acquisitions as well as the repurchase of VPP transactions.
The firm is narrowing its range of estimated capital as it records confidence in market conditions boosting a return to predicted production growth in 2H2017. It is aiming total production of 194 – 205 mmboe in 2017, representing a drop of 3% to modest advancement of 2% as against 2016, after adjusting for property sales. Of the FY2017 estimated total production, almost 33 to 35 mmboe is predicted to be crude oil, 18 to 20 mmboe is estimated to be natural gas liquids while 860 – 900 billion cubic feet is projected to be natural gas.