Chesapeake Energy ( NASDAQ: CHK ) +1.8% after easily beating expectations for Q3 adjusted earnings , helped by higher natural gas prices that surged 43% from the year-earlier quarter to average $6.955/MMBtu.
Q3 adjusted earnings more than doubled to $5.06/share from $2.38/share in the year-earlier quarter.
Chesapeake ( CHK ) generated $1.3B of operating cash flow in Q3 and had $74M of cash on hand at the end of the quarter.
Q3 net production totaled 4.1B cfe/day (90% natural gas), and CEO Dominic Dell'Osso said the company is planning for flat production next year , as it grapples with steep cost increases for materials and labor.
"In the near term, we really don't see any need for growth," Dell'Osso said in Chesapeake's ( CHK ) earnings conference call , according to Reuters, "so 2023 is probably setting up to be about flat on a year-over-year basis."
The CEO said inflation in the Haynesville shale gas region could surpass 15% next year, and the Marcellus shale should see mid-single-digit cost increases, an indication that soaring costs for energy producers are not easing soon.
Company executives said if prices fall to the low to mid-$3/MMBtu range for a sustained period, they would consider pulling back new activity.
The company also said it plans to exercise an option to take a 35% stake in a Momentum Midstream gas transport project from the Haynesville shale to the U.S. Gulf Coast.
Chesapeake Energy's ( CHK ) stock price return shows a 66% YTD gain and a 69% increase during the past year .
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Chesapeake points to rising costs as it plans for flat production next year