Chesapeake fourth quarter profit tops Street, shares rise

(Reuters) - Chesapeake Energy Corp reported fourth-quarter profit that topped Wall Street estimates on Thursday, helped by lower-than-expected expenses and more profitable oil production.

Shares of Chesapeake rose nearly 2 percent to $20.60 before the start of regular trading.

The earnings report came a day after Chesapeake said an internal investigation of the financial dealings of its outgoing chief executive, Aubrey McClendon, found no "intentional" wrongdoing.

McClendon is stepping down in April following a tumultuous year during which the company faced a liquidity crunch and a governance crisis. Now Chesapeake's board and big shareholders are working to rein in spending, pay down debt and increase production of more profitable oil.

McClendon, who founded the company in 1989, was not quoted in the earnings release as he typically is.

Phil Weiss, an analyst with Argus Research, said expenses in a number of areas came in below his projections while cash flow was higher than he anticipated.

General and administrative expenses fell to $99 million in the quarter from $138 million a year earlier.

"Costs are moving in the right direction on both general and administrative and production expense," analysts at Tudor Pickering Holt & Co said in a note to clients.

The Oklahoma City, Oklahoma, company said profit fell to $257 million, or 39 cents per share, in the fourth quarter, from $429 million, or 63 cents per share, in the same period a year earlier.

Excluding items, Chesapeake's profit came to 26 cents per share. Analysts, on average, had expected 14 cents, according to Thomson Reuters I/B/E/S.

Chesapeake said production of crude oil and natural gas liquids rose 39 percent to 147,500 barrels per day, while overall output rose 9 percent.

The U.S. Securities and Exchange Commission is examining McClendon's financial transactions, while the Department of Justice and the attorney general in Michigan are investigating whether Chesapeake violated antitrust laws.

A series of Reuters investigations last year triggered civil and criminal probes into the second-largest U.S. producer of natural gas. Big shareholders Carl Icahn and Southeastern Asset Management took control of the board in June after McClendon was stripped of the chairman job.

(Editing by Jeffrey Benkoe)

Source: http://news.yahoo.com/chesapeake-energy-posts-lower-quarterly-profit-122221528--finance.html

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