Chesapeake Energy plans $1bn in share buybacks
US shale company Chesapeake Energy said December 2 that its board of directors authorised the repurchase of up to $1bn in common stocks.
“The addition of a $1bn equity buyback programme, which we expect to execute over the next 24 months, highlights the advantages of our disciplined capital allocation strategy, our resiliency through commodity price cycles, and our commitment to maintaining a capital reinvestment rate in our business to sustain our current cash flow over the long term." CEO Nick Dell’Osso said.
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Chesapeake reported adjusted net income during the third quarter of $269mn. The company increased its expected 2021 adjusted Ebitdax, a reflection of core earnings, to a range of $2.1bn to $2.2bn. That marked an upward revision from the previous forecast of $1.8bn to $1.9bn.
On production performance, Chesapeake said it expected a net increase in output while at the same time maintaining capital discipline. It reported a net average rate of production of approximately 436,000 barrels of oil equivalent/day during the third quarter, with 80% of that in the form of natural gas.
Chesapeake exited bankruptcy in January, and announced the abrupt departure of CEO Doug Lawler on April 29 after nearly a decade at the top. It has recovered ground since then. This week it named Mohit Singh as its next executive vice president and CFO, effective December 6. Singh during the last six years served at BPX Energy, a US onshore subsidiary of the UK energy major. Before that, he worked as an investment banker with a focus on oil and gas transactions at RBC Capital Markets and Goldman Sachs.
Dell’Osso, meanwhile, said he estimated the return to shareholders would be in the range of $800mn to $1bn next year.