Chesapeake Energy Corp. (NYSE: CHK) reported third-quarter 2015 earnings before markets opened Wednesday. The oil and gas exploration and production company posted an adjusted net loss per share of $0.05 on revenues of $2.89 billion. In the same period a year ago, the company reported adjusted EPS of $0.38 on revenues of $5.7 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for a net loss per share of $0.13 and $3.02 billion in revenues.

On a GAAP basis the company reported a net loss of $4.7 billion ($7.08 per diluted share). The primary cause of the loss was a $4.51 billion non-cash drop in the carrying value of Chesapeake’s oil and gas assets due to the low prices for oil and natural gas. In the second quarter the company took a similar impairment charge of $3.7 billion.

Adjusted for asset sales, production rose 3% year over year and declined about 5% sequentially to approximately 667,000 barrels of oil equivalent per day. The added production and a cut of $200 million in expenses are the primary reasons the third-quarter loss was smaller than expected.

In the third quarter, Chesapeake posted an average realized price per barrel of oil of $62.68, down more than $5 a barrel sequentially and down more than $22.00 a barrel compared with the price a year ago. Oil provides 17% of Chesapeake’s total hydrocarbon production.

The company’s average realized price for natural gas was $1.14 per thousand cubic feet, down from $2.09 a year ago but higher than the $1.01 price in the second quarter of this year. Natural gas accounts for 72% of Chesapeake’s production.

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Natural gas liquids, the remaining 11% of the company’s production, contributed a loss of $1.38 per barrel, down from a positive $1.90 per barrel in the second quarter and $22.95 per barrel in the third quarter of 2014. Average realized prices include the effects of gains or losses from hedging.

Chesapeake revised its outlook for the 2015 fiscal year. Adjusted production is now expected to rise by 6% to 8% to a range of 675,000 to 695,000 barrels of oil equivalent per day. The prior estimate called for a rise of 5% to 7%. Capital expenditure guidance has been cut to a range of $3.4 billion to $3.9 billion

Analysts are expecting a fourth-quarter net loss of $0.20 per share on revenues of $2.88 billion, as well as a net loss of $0.34 per share on revenues of $11.76 billion for the full year.

CEO Doug Lawler said:

The many actions that we have taken this quarter, including executing new gas gathering agreements, amending our revolving credit facility, reducing complexity and commitments and lowering our business costs, have significantly increased Chesapeake’s ability to create additional value. Our focus on optimizing base production and continuing to generate efficiencies in the field drove a 3% increase in production compared to last year, adjusted for asset sales. In addition, the elimination of $200 million of annualized, controllable production and general and administrative expenses represents another step in our commitment to financial discipline. While the current price environment presents many challenges for our industry, we will continue focusing on our capital and operating cost efficiency, enhancing our cash flow and financial flexibility and optimizing our base production.

If Chesapeake could get some help on pricing from the market, prospects for a real turnaround would improve considerably. Unfortunately, such help may still be at least a year in the future.

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Chesapeake’s stock traded up about 3.4% in Wednesday’s premarket to $7.87. Shares closed up about 2.2% on Tuesday, at $7.61 in a 52-week range of $6.01 to $24.43. The consensus target price for the shares was $8.70 before the latest earnings report. The highest price target prior to the report was $13 a share.

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