Chesapeake reports net income of $929 million

Staff report

OKLAHOMA CITY

After showing a loss in the first quarter of the year, Chesapeake Energy has moved in a more- positive direction, reporting a net income of $929 million in the second quarter.

The company returned to profitability after selling $4.7 billion in assets during the second quarter. Chesapeake intends to make an additional $7 billion in sales during the third quarter of 2012, according to the company’s second-quarter financial report. Chesapeake has more than 40 drilling permits in Columbiana County and within the last few months purchased oil- and gas- production rights for 27,000 acres in Trumbull County.

Those sales planned by Chesapeake include land in the Midland and Delaware basin in Texas and New Mexico. The company did not announce sales of any local holdings.

“Chesapeake continues to focus on developing the wet gas and dry gas window of the Utica Shale play in Eastern Ohio,” according to the report.

The company has drilled 87 wells in Ohio. The 28 producing wells have peak rates averaging 1,000 barrels of oil equivalent per day. There are an additional 28 wells in the Utica waiting on pipeline connection.

Chesapeake’s recovery is being hampered by lower prices of natural gas. The average price for the second quarter was $1.88 per thousand cubic feet compared with an average price of $5.19 per thousand cubic feet during the same period in 2011.

The company increased production of more- profitable natural-gas liquids, such as propane and butane, by 65 percent, according to the Chesapeake report.

“For the 2012 second quarter, the company’s year-over-year growth rate of natural-gas production was 18 percent,” according to the report.