Chesapeake Energy profit jumps on higher output

Utilizado en Chesapeake (CHK), im-presionante

Chesapeake Energy Corp., the biggest U.S. natural gas producer, posted a sharply higher third-quarter profit Thursday, citing a continued increase in output and extensive production hedges.

Reported net income of $548 million, or $1.13 cents a share, up from $177 million, or 43 cents, a year ago. The results included an unrealized $150 million gain from hedges on oil and gas prices and interest rates that is typically not included in analysts' earnings estimates. Excluding this item, Chesapeake's income for the quarter would have been $373 million, or 83 cents a share. Analysts had expected Chesapeake to post earnings of 72 cents a share.

Over the past three months, Chesapeake boosted its energy output by 22% from the year-ago quarter to the equivalent of 147 billion cubic feet of gas a day, the results of an aggressive campaign to boost reserves through acquisitions and exploration. The move follows and even more impressive 45% jump in output in the previous quarter.

Chesapeake said it sees production growth of 23-24% for 2006 and raised its production growth forecasts in 2007 and 2008 to ranges of 14-18% and 10-14%, respectively, from previous forecasts of 10-12% and 5-7%.

Chesapeake estimated its proven reserves -- a key measure of assets and earnings potential -- at 8.4 trillion cubic feet with a year-to-date reserve replacement rate of 314%, which means it is increasing reserves at roughly three times its current production.