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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2024
chesapeakelogocolora42.jpg
CHESAPEAKE ENERGY CORPORATION
(Exact name of registrant as specified in its Charter)
Oklahoma001-1372673-1395733
(State or other jurisdiction of
incorporation)		(Commission File Number)(IRS Employer Identification No.)
6100 North Western AvenueOklahoma CityOK73118
(Address of principal executive offices)(Zip Code)
(405)848-8000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareCHKThe Nasdaq Stock Market LLC
Class A Warrants to purchase Common StockCHKEWThe Nasdaq Stock Market LLC
Class B Warrants to purchase Common StockCHKEZThe Nasdaq Stock Market LLC
Class C Warrants to purchase Common StockCHKELThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐


Item 2.02 Results of Operations and Financial Condition.

On July 29, 2024, Chesapeake Energy Corporation (“Chesapeake”) issued a press release reporting second quarter financial and operational results. A copy of the press release and financial information are attached hereto as Exhibit 99.1.

The information contained in the press release is being furnished, not filed, pursuant to Item 2.02. Accordingly, the information contained in the press release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

On July 30, 2024, Chesapeake will make a presentation about its financial and operating results for the second quarter of 2024. Chesapeake has made the presentation available on its website at https://investors.chk.com. This information is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits
Exhibit No.Document Description
Chesapeake Energy Corporation press release dated July 29, 2024
104.0Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CHESAPEAKE ENERGY CORPORATION
By: /s/ MOHIT SINGH
Mohit Singh
Executive Vice President and Chief Financial Officer
Date:  July 29, 2024

Exhibit 99.1
N E W S   R E L E A S E
chesapeakelogocolora40.jpg

FOR IMMEDIATE RELEASE
JULY 29, 2024

CHESAPEAKE ENERGY CORPORATION REPORTS SECOND QUARTER 2024 RESULTS

OKLAHOMA CITY, July 29, 2024 – Chesapeake Energy Corporation (NASDAQ:CHK) today reported second quarter 2024 financial and operating results.

•Net cash provided by operating activities of $209 million

•Net loss of $227 million, or $1.73 per fully diluted share; adjusted net income(1) of $1 million, or $0.01 per share

•Adjusted EBITDAX(1) of $358 million

•Quarterly base dividend of $0.575 per common share to be paid in September 2024, 14th straight quarter paying a dividend

•Produced approximately 2.75 bcf/d net (100% natural gas); building productive capacity with 75 combined DUCs and deferred TILs at the end of the quarter

•Lowered 2024 Capital and Production Expense guidance ~4% and ~8% respectively, primarily due to improved operational efficiency and year-over-year deflation

(1) Definitions of non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are included at the end of this news release.

Nick Dell’Osso, Chesapeake’s President and Chief Executive Officer, said, “We continue to execute our business as we prudently manage current market conditions and prepare for our pending combination with Southwestern. We remain focused on operational improvements and enhancing capital efficiency. The efforts of our team have positioned us to lower our 2024 capital and production expense guidance by $50 million and approximately 8%, respectively. Importantly, we expect these improvements will be durable through cycles, positioning us to lower our breakeven costs while we build productive capacity to more efficiently reach consumers when demand recovers.”


INVESTOR CONTACT:MEDIA CONTACT:CHESAPEAKE ENERGY CORPORATION
Chris Ayres
(405) 935-8870
ir@chk.com
Brooke Coe
(405) 935-8878
media@chk.com
6100 North Western Avenue
P.O. Box 18496
Oklahoma City, OK 73154

Shareholder Returns Update

Chesapeake plans to pay its base dividend of $0.575 per share on September 5, 2024 to stockholders of record at the close of business on August 15, 2024.

Inclusive of the dividend payable on September 5, 2024, Chesapeake has returned approximately $3.5 billion to shareholders since 2021 through dividends and share repurchases.
Operations Update

Chesapeake’s net production in the second quarter was approximately 2.75 bcfe per day (100% natural gas), utilizing an average of eight rigs to drill 30 wells and place four wells on production while building an inventory of five drilled but uncompleted ("DUCs") wells and 24 deferred turn in lines ("TILs"). Chesapeake is currently operating seven rigs and two completion crews, having dropped an additional rig in the Marcellus earlier in July.

Given continued weak market dynamics, the company is executing its previously disclosed plan to defer completions and new well TILs, building short-cycle, capital-efficient productive capacity, which can be activated when supply and demand imbalances correct. At the end of the second quarter, the company had 29 DUCs, excluding working inventory, and 46 deferred TILs. For the full-year, the company expects to drill 95 — 115 wells and place 30 — 40 wells on production, which is consistent with previous guidance.

Chesapeake continues to deliver improved capital efficiency primarily driven by the positive impact of longer laterals, optimized well designs, enhanced saltwater disposal techniques and capturing market deflation. As a result, the company is lowering full-year 2024 capital guidance $50 million to $1.2 to $1.3 billion and production expense guidance $0.02 to $0.21 to $0.26 per mcf.

ESG Update

The company issued its 2023 Sustainability Report, marking Chesapeake's 12th consecutive year reporting on its environmental, social, and governance performance and its resilience in a lower carbon future. The Report can be accessed on Chesapeake's website at chk.com under the "sustainability" section and reflects the company's commitment to transparency and enhanced disclosures.



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Conference Call Information

Chesapeake plans to conduct a conference call to discuss its recent financial and operating results at 9:00 a.m. EDT on Tuesday, July 30, 2024. The telephone number to access the conference call is 1-888-317-6003 or 1-412-317-6061 for international callers. The passcode is 4204243.

Financial Statements, Non-GAAP Financial Measures and 2024 Guidance and Outlook Projections

Reconciliations of each non-GAAP financial measure used in this news release to the most directly comparable GAAP financial measure are provided below. Additional detail on the company’s 2024 second quarter financial and operational results, along with non-GAAP measures that adjust for items typically excluded by certain securities analysts, are available on the company’s website. Non-GAAP measures should not be considered as an alternative to GAAP measures. Management’s updated guidance for 2024 can be found on the company’s website at www.chk.com.

Headquartered in Oklahoma City, Chesapeake Energy Corporation (NASDAQ:CHK) is powered by dedicated and innovative employees who are focused on discovering and responsibly developing our leading positions in top U.S. natural gas plays. With a goal to achieve net zero GHG emissions (Scope 1 and 2) by 2035, Chesapeake is committed to safely answering the call for affordable, reliable, lower carbon energy.
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Forward-Looking Statements

This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include our current expectations or forecasts of future events, including matters relating to the pending merger with Southwestern Energy Company (“Southwestern”), armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, and the impact of each on our business, financial condition, results of operations and cash flows, the potential effects of our bankruptcy plan of reorganization on our operations, management, and employees, actions by, or disputes among or between, members of OPEC+ and other foreign oil-exporting countries, market factors, market prices, our ability to meet debt service requirements, our ability to continue to pay cash dividends, the amount and timing of any cash dividends and our ESG initiatives. Forward-looking and other statements in this release regarding our environmental, social and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Forward-looking statements often address our expected future business, financial performance and financial condition, and often contain words such as "expect," “could,” “may,” "anticipate," "intend," "plan," “ability,” "believe," "seek," "see," "will," "would," “estimate,” “forecast,” "target," “guidance,” “outlook,” “opportunity” or “strategy.” The absence of such words or expressions does not necessarily mean the statements are not forward-looking.

Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:

•conservation measures and technological advances could reduce demand for natural gas and oil;
•negative public perceptions of our industry;
•competition in the natural gas and oil exploration and production industry;
•the volatility of natural gas, oil and NGL prices, which are affected by general economic and business conditions, as well as increased demand for (and availability of) alternative fuels and electric vehicles;
•risks from regional epidemics or pandemics and related economic turmoil, including supply chain constraints;
•write-downs of our natural gas and oil asset carrying values due to low commodity prices;
•significant capital expenditures are required to replace our reserves and conduct our business;
•our ability to replace reserves and sustain production;
•uncertainties inherent in estimating quantities of natural gas, oil and NGL reserves and projecting future rates of production and the amount and timing of development expenditures;
•drilling and operating risks and resulting liabilities;
•our ability to generate profits or achieve targeted results in drilling and well operations;
•leasehold terms expiring before production can be established;
•risks from our commodity price risk management activities;
•uncertainties, risks and costs associated with natural gas and oil operations;
•our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used;
•pipeline and gathering system capacity constraints and transportation interruptions;
•our plans to participate in the LNG export industry;
•terrorist activities and/or cyber-attacks adversely impacting our operations;
•risks from failure to protect personal information and data and compliance with data privacy and security laws and regulations;
•disruption of our business by natural or human causes beyond our control;
•a deterioration in general economic, business or industry conditions;
•the impact of inflation and commodity price volatility, including as a result of armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, on our business, financial condition, employees, contractors, vendors and the global demand for natural gas and oil and on U.S. and global financial markets;
•our inability to access the capital markets on favorable terms;
•the limitations on our financial flexibility due to our level of indebtedness and restrictive covenants from our indebtedness;
•our actual financial results after emergence from bankruptcy may not be comparable to our historical financial information;
•risks related to acquisitions or dispositions, or potential acquisitions or dispositions, including risks related to the pending merger with Southwestern, such as the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the risk that we or Southwestern may be unable to obtain governmental and regulatory approvals required for the proposed transaction, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger; the risk that the parties may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to limitation on our ability to pursue alternatives to the merger; risks related to change in control or other provisions in certain agreements that may be triggered upon completion of the merger; risks related to the merger agreement’s restrictions on business activities prior to the effective time of the merger; risks related to loss of management personnel, other key employees, customers, suppliers, vendors, landlords, joint venture partners and other business partners following the merger; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of our common stock or
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Southwestern’s common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; and the risk that the combined company may be unable to achieve synergies or other anticipated benefits of the proposed transaction or it may take longer than expected to achieve those synergies or benefits;
•our ability to achieve and maintain ESG certifications, goals and commitments;
•legislative, regulatory and ESG initiatives, addressing environmental concerns, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal;
•federal and state tax proposals affecting our industry;
•risks related to an annual limitation on the utilization of our tax attributes, which is expected to be triggered upon completion of the merger, as well as trading in our common stock, additional issuances of common stock, and certain other stock transactions, which could lead to an additional, potentially more restrictive, annual limitation; and
•other factors that are described under Risk Factors in Item 1A of Part I of our Annual Report on Form 10-K.

We caution you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the filing date, and we undertake no obligation to update this information. We urge you to carefully review and consider the disclosures in this release and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.


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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
($ in millions, except per share data)June 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$1,019 $1,079 
Restricted cash76 74 
Accounts receivable, net350 593 
Derivative assets361 637 
Other current assets207 226 
Total current assets2,0132,609
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties12,105 11,468 
Unproved properties1,800 1,806 
Other property and equipment512 497 
Total property and equipment14,417 13,771 
Less: accumulated depreciation, depletion and amortization(4,413)(3,674)
Total property and equipment, net10,004 10,097 
Long-term derivative assets19 74 
Deferred income tax assets995 933 
Other long-term assets577 663 
Total assets$13,608 $14,376 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$274 $425 
Accrued interest39 39 
Derivative liabilities7 3 
Other current liabilities611 847 
Total current liabilities931 1,314 
Long-term debt, net2,021 2,028 
Long-term derivative liabilities3 9 
Asset retirement obligations, net of current portion264 265 
Other long-term liabilities19 31 
Total liabilities3,238 3,647 
Contingencies and commitments
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized: 131,252,107 and 130,789,936 shares issued1 1 
Additional paid-in capital5,768 5,754 
Retained earnings4,601 4,974 
Total stockholders' equity10,370 10,729 
Total liabilities and stockholders' equity$13,608 $14,376 
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
($ in millions, except per share data)
Revenues and other:
Natural gas, oil and NGL$378 $649 $967 $2,102 
Marketing136 611 448 1,263 
Natural gas and oil derivatives(11)159 161 1,089 
Gains on sales of assets2 472 10 807 
Total revenues and other505 1,891 1,586 5,261 
Operating expenses:
Production49 89 108 220 
Gathering, processing and transportation154 207 327 471 
Severance and ad valorem taxes18 40 47 109 
Exploration3 8 5 15 
Marketing141 611 464 1,262 
General and administrative47 31 94 66 
Separation and other termination costs23 3 23 3 
Depreciation, depletion and amortization348 376 747 766 
Other operating expense, net16 9 33 12 
Total operating expenses799 1,374 1,848 2,924 
Income (loss) from operations(294)517 (262)2,337 
Other income (expense):
Interest expense(20)(22)(39)(59)
Losses on purchases, exchanges or extinguishments of debt(2)— (2)— 
Other income21 23 41 33 
Total other income (expense)(1)1 — (26)
Income (loss) before income taxes(295)518 (262)2,311 
Income tax expense (benefit)(68)127 (61)531 
Net income (loss)$(227)$391 $(201)$1,780 
Earnings (loss) per common share:
Basic$(1.73)$2.93 $(1.53)$13.27 
Diluted$(1.73)$2.73 $(1.53)$12.36 
Weighted average common shares outstanding (in thousands):
Basic131,168 133,514 131,030 134,125 
Diluted131,168143,267131,030144,007

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
($ in millions)2024202320242023
Cash flows from operating activities:
Net income (loss)$(227)$391 $(201)$1,780 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization348 376 747 766 
Deferred income tax expense (benefit)(68)21 (61)399 
Derivative (gains) losses, net11 (159)(161)(1,089)
Cash receipts (payments) on derivative settlements, net260 236 488 (49)
Share-based compensation10 9 19 16 
Gains on sales of assets(2)(472)(10)(807)
Losses on purchases, exchanges or extinguishments of debt2 — 2 — 
Other6 17 (7)29 
Changes in assets and liabilities(131)96 (55)359 
Net cash provided by operating activities2095157611,404
Cash flows from investing activities:
Capital expenditures(302)(530)(723)(1,027)
Receipts of deferred consideration56 — 116 — 
Contributions to investments(26)(49)(45)(88)
Proceeds from divestitures of property and equipment6 1,032 12 1,963 
Net cash provided by (used in) investing activities(266)453(640)848
Cash flows from financing activities:
Proceeds from Credit Facility— 125 — 1,125 
Payments on Credit Facility— (125)— (2,175)
Funds held for transition services— 97 — 97 
Proceeds from warrant exercise1 — 1 — 
Debt issuance and other financing costs(4)— (4)— 
Cash paid to repurchase and retire common stock— (127)— (181)
Cash paid for common stock dividends(99)(160)(176)(335)
Net cash used in financing activities(102)(190)(179)(1,469)
Net increase (decrease) in cash, cash equivalents and restricted cash(159)778 (58)783 
Cash, cash equivalents and restricted cash, beginning of period1,2541971,153192
Cash, cash equivalents and restricted cash, end of period$1,095 $975 $1,095 $975 
Cash and cash equivalents$1,019 $903 $1,019 $903 
Restricted cash76727672
Total cash, cash equivalents and restricted cash$1,095 $975 $1,095 $975 
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NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
Three Months Ended June 30, 2024
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,554 1.35 — — — — 1,554 1.35 
Haynesville1,191 1.70 — — — — 1,191 1.70 
Total2,745 1.51 — — — — 2,745 1.51 
Average NYMEX Price1.89 — 
Average Realized Price (including realized derivatives)2.51 — — 2.51 
Three Months Ended June 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,830 1.51 — — — — 1,830 1.51 
Haynesville1,590 1.77 — — — — 1,590 1.77 
Eagle Ford85 2.32 15 76.39 10 23.67 233 6.73 
Total3,505 1.65 15 76.39 10 23.67 3,653 1.97 
Average NYMEX Price2.10 73.78 
Average Realized Price (including realized derivatives)2.36 84.58 23.67 2.67 
Six Months Ended June 30, 2024
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,637 1.71 — — — — 1,637 1.71 
Haynesville1,334 1.88 — — — — 1,334 1.88 
Total2,971 1.79 — — — — 2,971 1.79 
Average NYMEX Price2.07 — 
Average Realized Price (including realized derivatives)2.69 — — 2.69 
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Six Months Ended June 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,901 2.52 — — — — 1,901 2.52 
Haynesville1,570 2.32 — — — — 1,570 2.32 
Eagle Ford106 2.11 34 76.72 13 25.54 389 8.19 
Total3,577 2.42 34 76.72 13 25.54 3,860 3.01 
Average NYMEX Price2.76 74.96 
Average Realized Price (including realized derivatives)2.55 70.67 25.54 3.08 


CAPITAL EXPENDITURES ACCRUED (unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
($ in millions)
Drilling and completion capital expenditures:
Marcellus$93 $115 $198 $233 
Haynesville131 254 326 513 
Eagle Ford— 90 — 213 
Total drilling and completion capital expenditures224 459 524 959 
Non-drilling and completion - field39 28 74 52 
Non-drilling and completion - corporate30 18 49 38 
Total capital expenditures$293 $505 $647 $1,049 

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NON-GAAP FINANCIAL MEASURES

As a supplement to the financial results prepared in accordance with U.S. GAAP, Chesapeake’s quarterly earnings releases contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Net Debt. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. Management believes these adjusted financial measures are a meaningful adjunct to earnings and cash flows calculated in accordance with GAAP because (a) management uses these financial measures to evaluate the company’s trends and performance, (b) these financial measures are comparable to estimates provided by certain securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items.

Chesapeake's definitions of each non-GAAP measure presented herein are provided below. Because not all companies or securities analysts use identical calculations, Chesapeake’s non-GAAP measures may not be comparable to similarly titled measures of other companies or securities analysts.

Adjusted Net Income: Adjusted Net Income is defined as net income (loss) adjusted to exclude unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Chesapeake believes that Adjusted Net Income facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Net Income should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

Adjusted Diluted Earnings Per Common Share: Adjusted Diluted Earnings Per Common Share is defined as diluted earnings (loss) per common share adjusted to exclude the per diluted share amounts attributed to unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Chesapeake believes that Adjusted Diluted Earnings Per Common Share facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Diluted Earnings Per Common Share should not be considered an alternative to, or more meaningful than, earnings (loss) per common share as presented in accordance with GAAP.

Adjusted EBITDAX: Adjusted EBITDAX is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration expense, unrealized (gains) losses on natural gas and oil derivatives, separation and other termination costs, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results. Adjusted EBITDAX is presented as it provides investors an indication of the company's ability to internally fund exploration and development activities and service or incur debt. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

Free Cash Flow: Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures. Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders. Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results. Adjusted Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders and is used to determine Chesapeake's quarterly variable dividend. Adjusted Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

Net Debt: Net Debt is defined as GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents. Net Debt is useful to investors as a widely understood measure of liquidity and leverage, but this measure should not be considered as an alternative to, or more meaningful than, total debt presented in accordance with GAAP.
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RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
($ in millions)2024202320242023
Net income (loss) (GAAP)$(227)$391 $(201)$1,780 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives26278 329(1,041)
Separation and other termination costs233 233 
Gains on sales of assets(2)(472)(10)(807)
Other operating expense, net16 8 35 15 
Losses on purchases, exchanges or extinguishments of debt2 — 2 — 
Other(5)(9)(13)(15)
Tax effect of adjustments(a)
(68)93 (84)427 
Adjusted net income (Non-GAAP)$1 $92 $81 $362 
(a)
The three- and six-month periods ended June 30, 2024 and June 30, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.

RECONCILIATION OF EARNINGS (LOSS) PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
($/share)2024202320242023
Earnings (loss) per common share (GAAP)$(1.73)$2.93 $(1.53)$13.27 
Effect of dilutive securities— (0.20)— (0.91)
Diluted earnings (loss) per common share (GAAP)$(1.73)$2.73 $(1.53)$12.36 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives1.99 0.54 2.51 (7.24)
Separation and other termination costs0.17 0.02 0.17 0.02 
Gains on sales of assets(0.01)(3.30)(0.08)(5.60)
Other operating expense, net0.13 0.06 0.27 0.11 
Losses on purchases, exchanges or extinguishments of debt0.01 — 0.01 — 
Other(0.03)(0.06)(0.10)(0.11)
Tax effect of adjustments(a)
(0.52)0.65 (0.64)2.97 
Effect of dilutive securities— — (0.04)— 
Adjusted diluted earnings per common share (Non-GAAP)$0.01 $0.64 $0.57 $2.51 
(a)
The three- and six-month periods ended June 30, 2024 and June 30, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
12


RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDAX (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
($ in millions)
Net income (loss) (GAAP)$(227)$391 $(201)$1,780 
Adjustments:
Interest expense20 22 39 59 
Income tax expense (benefit)(68)127 (61)531 
Depreciation, depletion and amortization348 376 747 766 
Exploration3 8 5 15 
Unrealized (gains) losses on natural gas and oil derivatives262 78 329 (1,041)
Separation and other termination costs23 3 23 3 
Gains on sales of assets(2)(472)(10)(807)
Other operating expense, net16 8 35 15 
Losses on purchases, exchanges or extinguishments of debt2 — 2 — 
Other(19)(17)(42)(23)
Adjusted EBITDAX (Non-GAAP)$358 $524 $866 $1,298 
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
($ in millions)
Net cash provided by operating activities (GAAP)$209 $515 $761 $1,404 
Cash capital expenditures(302)(530)(723)(1,027)
Free cash flow (Non-GAAP)(93)(15)38 377 
Cash contributions to investments(26)(49)(45)(88)
Free cash flow associated with divested assets(a)
— (26)— (138)
Adjusted free cash flow (Non-GAAP)$(119)$(90)$(7)$151 
(a)In March and April of 2023, we closed two divestitures of certain Eagle Ford assets. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction.
RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)
($ in millions)June 30, 2024
Total debt (GAAP)$2,021 
Premiums and issuance costs on debt(71)
Principal amount of debt1,950 
Cash and cash equivalents(1,019)
Net debt (Non-GAAP)$931 
13
v3.24.2
Cover Page
Jul. 29, 2024
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date Jul. 29, 2024
Entity Registrant Name CHESAPEAKE ENERGY CORPORATION
Entity Incorporation, State or Country Code OK
Entity File Number 001-13726
Entity Tax Identification Number 73-1395733
Entity Address, Address Line One 6100 North Western Avenue
Entity Address, City or Town Oklahoma City
Entity Address, State or Province OK
Entity Address, Postal Zip Code 73118
City Area Code (405)
Local Phone Number 848-8000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000895126
Amendment Flag false
Class A Warrants to purchase Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Class A Warrants to purchase Common Stock
Trading Symbol CHKEW
Security Exchange Name NASDAQ
Class B Warrants to purchase Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Class B Warrants to purchase Common Stock
Trading Symbol CHKEZ
Security Exchange Name NASDAQ
Class C Warrants to purchase Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Class C Warrants to purchase Common Stock
Trading Symbol CHKEL
Security Exchange Name NASDAQ
Common Stock  
Entity Information [Line Items]  
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol CHK
Security Exchange Name NASDAQ
Chesapeake Energy (NASDAQ:CHK)
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