Executive Summary

Q4 2023 delivered $1.95B total revenues and other, GAAP diluted EPS of $4.02, and adjusted EPS of $1.31; Adjusted EBITDAX was $635M and free cash flow was $91M, supported by hedge settlements and gains on Eagle Ford divestitures .
2024 outlook lowered capex ~20% to $1.25–$1.35B, with a baseline production guide of 2.65–2.75 Bcf/d and explicit rig and frac-crew reductions to build short-cycle capacity; LNG commercialization advanced via SPAs with Delfin (Henry Hub linked) and sales to Gunvor (JKM linked) .
Portfolio transition continued: remaining Eagle Ford package closed (~$700M), net debt was $871M with $1.08B cash on hand at year-end; operations stayed gas-weighted (~98% gas) with net production ~3.43 Bcfe/d .
S&P Global estimates were unavailable via the tool at time of writing; comparisons to Wall Street consensus could not be performed (S&P Global consensus not accessible).

What Went Well and What Went Wrong

What Went Well

Strong cash generation and liquidity: Q4 operating cash flow $470M and free cash flow $91M; year-end cash $1.08B; net debt $871M .
Strategic progress toward LNG: signed two long-term SPAs—0.5 mtpa offtake from Delfin at Henry Hub, FOB sale to Gunvor at JKM for 20 years—with 2028 start targeted; CEO underscored strategy to “Be LNG Ready” and compete globally post-Southwestern merger .
- “Our strategic combination with Southwestern will make our future outlook even stronger… forming the first U.S. independent that can truly compete on a global scale” — Nick Dell’Osso, CEO .
Efficiency and safety: ~40% YoY TRIR improvement to 0.14; sustained MiQ/EO100 recertification (100% responsibly sourced gas); continued operational discipline with rig and completion reductions to match market .

What Went Wrong

Pricing headwinds: Natural gas realized prices fell sharply YoY; Q4 total revenues declined to $1.95B from $4.13B YoY, and GAAP EPS fell to $4.02 from $24.00 YoY, reflecting the commodity price cycle normalization versus 2022 .
Heavy non-GAAP adjustments: Adjusted EPS of $1.31 reflects exclusions of unrealized derivative gains ($347M) and asset sale gains ($139M), highlighting headline GAAP EPS uplift from one-time/mark-to-market effects .
Activity deferrals: The company is deferring TILs and completion activity (dropping rigs and frac crews) through 2024, signaling volume moderation to align with demand, which may constrain near-term growth visibility .

Financial Results

Quarterly Progression (Q2 → Q3 → Q4 2023)

Metric	Q2 2023	Q3 2023	Q4 2023
Total Revenues and Other ($USD Millions)	$1,891	$1,512	$1,948
Natural Gas, Oil & NGL Revenues ($USD Millions)	$649	$682	$763
Net Income ($USD Millions)	$391	$70	$569
Diluted EPS (GAAP, $)	$2.73	$0.49	$4.02
Adjusted Diluted EPS (Non-GAAP, $)	$0.64	$1.09	$1.31
Adjusted EBITDAX ($USD Millions)	$524	$580	$635
Free Cash Flow ($USD Millions, Non-GAAP)	$(15)	$83	$91
Net Income Margin (%)	20.7% (391/1,891)	4.6% (70/1,512)	29.2% (569/1,948)
Adjusted EBITDAX Margin (%)	27.7% (524/1,891)	38.4% (580/1,512)	32.6% (635/1,948)

YoY Comparison (Q4 2022 vs Q4 2023)

Metric	Q4 2022	Q4 2023	YoY Change
Total Revenues and Other ($USD Millions)	$4,126	$1,948	-52.8%
Natural Gas, Oil & NGL Revenues ($USD Millions)	$2,201	$763	-65.3%
Diluted EPS (GAAP, $)	$24.00	$4.02	-83.3%

Segment and Price KPIs (Volumes and Realized Prices)

Basin (Q4 2023)	Gas Vol. (MMcf/d)	Gas Realized ($/Mcf)	Oil Vol. (MBbl/d)	Oil Realized ($/Bbl)	NGL Vol. (MBbl/d)	NGL Realized ($/Bbl)	Total Vol. (MMcfe/d)	Total Realized ($/Mcfe)
Marcellus	1,801	$2.15	—	—	—	—	1,801	$2.15
Haynesville	1,497	$2.41	—	—	—	—	1,497	$2.41
Eagle Ford	52	$2.42	6	$82.49	7	$25.67	129	$6.30
Total	3,350	$2.27	6	$82.49	7	$25.67	3,427	$2.42

Operational KPIs (Q2 → Q3 → Q4 2023)

KPI	Q2 2023	Q3 2023	Q4 2023
Net Production (MMcfe/d)	3,653	3,495	~3,430
Avg. Rigs	12	9	9
Wells Drilled	53	35	45
Wells Placed on Production	27	34	52
Adjusted EBITDAX ($MM)	524	580	635
Free Cash Flow ($MM)	(15)	83	91
Cash and Equivalents ($MM)	903	713	1,079
Net Debt ($MM)	1,047	1,237	871

Non-GAAP notes: Q4 adjusted metrics exclude unrealized derivative gains ($347M) and gains on sales of assets ($139M), among other items; tax effects applied at 23% statutory rate .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures ($B)	FY 2024	Not disclosed in filing	$1.25–$1.35	Lowered ~20%
Baseline Net Gas Production (Bcf/d)	FY 2024	Not disclosed in filing	2.65–2.75	New baseline guide
Activity Levels	FY 2024	—	Drop 1 rig in Haynesville (Mar), 1 in Marcellus (mid-year); drop 1 frac crew per basin in Mar; drill 95–115 wells; TIL 30–40	Reduced/delayed completions
LNG Commercialization	Multi-year	HOA with Gunvor/Lake Charles (earlier)	SPAs signed: ~0.5 mtpa with Delfin (Henry Hub), sales to Gunvor (JKM), 20-year term, target start 2028	Advanced from HOA to SPAs
Strategic	2024	—	Southwestern Energy merger targeted close Q2 2024	New corporate action
Dividend	Near-term	—	Base dividend payout schedule (paid Mar 26, 2023 noted in release context)	Maintained base dividend

Earnings Call Themes & Trends

Note: The Q4 2023 earnings call transcript could not be retrieved due to a system error; themes below reflect management communications from Q2/Q3/Q4 earnings materials.

Topic	Previous Mentions (Q2 2023, Q3 2023)	Current Period (Q4 2023)	Trend
LNG readiness/commercialization	HOA with Lake Charles/Gunvor (JKM) ; HOA with Vitol up to 1 mtpa (JKM)	Signed SPAs: ~0.5 mtpa offtake with Delfin (Henry Hub), FOB sale to Gunvor (JKM), 20-year term, 2028 start	Progressing from HOA to binding SPAs
Capital discipline/deferrals	Released rigs; flexible plan; Q3 elected deferrals of 60% Marcellus TILs	Capex -20%; rig/frac reductions; deferring TILs to build short-cycle capacity	Heightened discipline amid low gas prices
ESG/responsibly sourced gas	Marcellus recertified (MiQ Grade A, EO100 A-)	100% portfolio recertified; broader net zero 2035 scope	Sustained ESG execution
Credit ratings/liquidity	Upgrades to Ba1/B+; cash ~$900M	Positive watch S&P; cash $1.08B; net debt $871M	Improving credit profile
Corporate strategy	—	SWN merger targeted Q2 2024 close; global competitiveness narrative	Transformational combination

Management Commentary

“Our 2024 operating plan is designed to prudently respond to today’s market… focus on capital discipline, operational efficiency, and free cash flow generation… Our strategic combination with Southwestern will make our future outlook even stronger…” — Nick Dell’Osso, CEO .
Q3 context: “We continue to show the resilience of this organization and assets in the midst of lower commodity prices… focus is clear — to ‘Be LNG Ready’…” — CEO .
Q2 context: “We were purposefully built to deliver sustainable performance through commodity cycles… focus is clear – to Be LNG Ready…” — CEO .

Q&A Highlights

The Q4 2023 earnings call transcript was not accessible due to a retrieval error; Q&A themes cannot be cited. Key areas likely covered based on company communications include capex reductions, activity deferrals, LNG SPAs terms, and merger timeline, but specific Q&A responses are unavailable.

Estimates Context

Wall Street consensus estimates from S&P Global were unavailable via the tool for CHK at the time of analysis; as a result, explicit comparisons to consensus for revenue/EPS cannot be provided. Values retrieved from S&P Global were not accessible.

Key Takeaways for Investors

Chesapeake is leaning hard into capital discipline: 2024 capex cut ~20%, with rig and frac-crew reductions and deferred completions to align supply with demand; expect near-term volume moderation but enhanced optionality when prices/demand inflect .
LNG commercialization is now tangible: SPAs with Delfin/Gunvor move “Be LNG Ready” from concept to contracts, creating a future linkage to JKM pricing and incremental demand pull starting in 2028 .
Balance sheet resilience provides flexibility: year-end cash $1.08B and net debt $871M mitigate cycle risk and enable capital returns and strategic actions (including the SWN merger) .
Non-GAAP adjustments matter: Q4 GAAP EPS of $4.02 vs adjusted $1.31 underscores the impact of derivative gains and asset sales; use adjusted metrics for run-rate performance assessment .
Operational execution remains strong despite deferrals: Q4 adjusted EBITDAX improved sequentially to $635M; free cash flow positive; safety/ESG metrics strengthen brand and access to LNG markets .
The Southwestern merger is a medium-term catalyst: scale, market access, and LNG exposure may reposition the combined entity for global competitiveness and valuation re-rating over time, subject to approvals and integration .
Near-term trading lens: Gas-weighted profile and activity deferrals tie performance to gas macro (Henry Hub, LNG commissioning cadence); watch for updates on 2024 activity cadence and LNG contract milestones .

CHESAPEAKE ENERGY CORP (CHK)·Q4 2023 Earnings Summary