Chesapeake Energy Corp. (NYSE: CHK) reported second-quarter 2015 earnings before markets opened Wednesday. The oil and gas exploration and production company posted an adjusted net loss per share of $0.11 on revenues of $3.03 billion. In the same period a year ago, the company reported adjusted EPS of $0.36 on revenues of $5.15 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for a net loss per share of $0.11 and $2.76 billion in revenues.

Adjusted for asset sales, production rose 13% year over year and 2% sequentially to approximately 703,000 barrels of oil equivalent per day.

On a GAAP basis, the company reported a net loss of $4.15 billion ($6.27 per diluted share). The primary cause of the loss was a $3.67 billion drop in the carrying value due to the low prices for oil and natural gas. That is roughly the same size as the first-quarter drop in Chesapeake’s carrying value.

Chesapeake revised its outlook for the rest of the 2015 fiscal year. Production is now expected to rise by 5% to 7% to a range of 667,000 to 677,000 barrels of oil equivalent per day.

In the second quarter, Chesapeake posted an average realized price per barrel of oil of $67.91, up more than $5 a barrel sequentially, but down about $17.50 a barrel compared with the price a year ago. Oil is equal to 17% of Chesapeake’s total hydrocarbon production.

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The company’s average realized price for natural gas was just $1.01 per thousand cubic feet, down from $2.45 a year ago and $2.37 in the first quarter of this year. Natural gas accounts for 72% of Chesapeake’s production.

Natural gas liquids, the remaining 11% of the company’s production, also saw a sharp price drop, from $6.99 per barrel in the first quarter and $21.03 per barrel in the second quarter of 2014.

Analysts are calling for a third-quarter net loss of $0.11 per share on revenues of $2.75 billion, as well as a net loss of $0.28 per share on revenues of $10.96 billion for the full year.

CEO Doug Lawler said:

We are currently expecting a stronger production trajectory as we enter 2016 and, as a result, we have raised our 2015 production guidance by 4%. We currently expect our 2015 exit rate to be approximately 660,000 barrels of oil equivalent per day, despite our voluntary curtailment of 50,000 net boe per day and the sharply reduced 2015 drilling activity. Our 2015 second quarter drilling and completion capital program was executed as planned, and we expect to stay within our annual capex guidance of $3.5 – $4.0 billion. … [W]e are reviewing opportunities in multiple operating areas to create additional value through strategic asset sales, joint venture agreements and participation, or farmout agreements. Options for potential transaction proceeds include additional drilling in 2016 and enhancing our capital structure. We are not finished with the transformation of Chesapeake into a top-tier E&P company, and we look forward to the opportunities that lie ahead.

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Another massive charge related to the prices of natural gas and oil pushed the company’s net loss even higher than it was in the first quarter, on a GAAP basis. Whether or not Chesapeake can drill its way out of the fix it finds itself in is arguable. Unless prices improve, however, it is hard to see how losing less on each barrel of oil equivalent is going to solve the company’s problems.

Chesapeake’s stock traded up about 1.3% in Wednesday’s premarket session, at $8.10 in a 52-week range of $7.96 to $27.24. The low was posted Tuesday. The consensus target price for the shares was $12.57 before the latest report. The highest price target prior to the report was $21 a share.

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