Chesapeake.

Chesapeake loses $6 billion Tuesday, May 05, 2009 5/5/2009 5:23:18 AM Chesapeake Energy Corp. posted a first-quarter loss of nearly $6 billion Monday as tumbling natural gas prices forced one of the nation's largest gas producers to write down the value of its gas and oil properties. Oklahoma City-based Chesapeake said it lost $5.7 billion, or $9.63 per share, compared with a loss of $132 million, or 29 cents a share, in the year-ago quarter. Excluding special charges, Chesapeake recorded a profit of $277 million, or 46 cents, a share for the quarter. Excluding a $704 million charge in the year-ago quarter, Chesapeake would have made $561 million, or $1.09 per share. Revenue rose 25 percent to $2 billion from $1.6 billion a year ago. Chesapeake recorded a charge of $6 billion for writing down the value of its natural gas and oil properties. The charge reflects a 36 percent decline in natural gas prices to $3.63 per 1,000 cubic feet on March 31 from $5.71 per 1,000 cubic feet on Dec. 31. Along with oil prices and other commodities, gas prices have fallen 73 percent since peaking last June as the country fell into a recession and demand plummeted, especially as auto companies and steelmakers cut production with new sources of gas coming online. Chesapeake and other energy companies have been slashing drilling and production. Chesapeake said Monday that it would reduce its drilling budget for 2009 and 2010 by an additional $500 million. Chesapeake said last month that it would cut production by 13 percent, double what it had announced in March. Still, Chesapeake said Monday that daily production was up 5 percent in the quarter over a year ago and 2 percent above fourth-quarter production. Chesapeake, which sold stakes in some of its projects in the past year to generate proceeds of $10.3 billion, said it plans further sales this year to raise $1.5 billion to $2 billion. The report was released after the stock market closed. Shares rose $1.93, or 9 percent, to $22.82. Chesapeake shares hit $74 last summer as prices rose but then tumbled all the way to $9.84 in December, the lowest level in more than five years. CEO Aubrey McClendon received the fattest pay package of any chief executive in the country last year, $112.5 million, according to an Associated Press analysis.