Oppenheimer's First Look at Chesapeake Energy

In a research report published this morning, Oppenheimer commented on Chesapeake Energy's

earnings call. According to Oppenheimer, "CHK's adjusted 1Q12 earnings were $137M, or $0.18/sh, below consensus of $0.29/sh, down 76% YoY and 69% sequentially on lower natural gas prices. Production rose 18% and 2%, respectively, with liquids volumes up 69% and 7%. CHK now expects 1Q12 to be the CAPEX peak, and lowered 2013 spending and production guidance to reflect a sharp drop in dry gas drilling, modest liquids-rich spending cuts and asset sales. CHK now faces a funding gap of roughly $9.5B this year and $4.65B next year, which it expects to offset with asset sales of $12.75B and $6B, respectively. CHK also announced plans on 5/1/12 to appoint an independent non-executive chairman in the near future amid recent concerns over corporate governance." Oppenheimer maintains its Outperform rating and $28 PT on Chesapeake Energy, which closed yesterday at $19.60.