Chesapeake Energy Corp. (NYSE: CHK) reported fourth-quarter and full-year 2018 results before markets opened Tuesday morning. For the quarter, the oil and gas exploration and production company posted adjusted earnings per share (EPS) of $0.49 on revenues of $3.07 billion. In the same period a year ago, the company reported adjusted EPS of $0.33 on revenues of $2.52 billion. Fourth-quarter results also compare to consensus estimates for EPS of $0.19 and $2.3 billion in revenues.

For the full year, Chesapeake reported EPS of $0.85 and revenues of $10.23 billion, compared to 2017 EPS of $0.90 and revenues of $9.5 billion. Analysts were looking for $0.83 in EPS and revenues of $9.53 billion.

CEO Doug Lawler commented:

We have also materially improved our financial leverage and significantly reduced our obligations, commitments and complexity. Our 2018 accomplishments of 10 percent adjusted oil growth, improved realizations and lower absolute cash costs compared to 2017 resulted in the highest EBITDA generated per boe for Chesapeake since 2014, when oil averaged more than $90 per barrel and gas averaged more than $4 per thousand cubic feet.

Lower costs, higher realized prices and higher production, that’s a formula that can’t be beaten, and Chesapeake expects to continue to improve in those three areas again this year. The company’s outlook calls for oil production growth of 32% to a range of 116,000 to 122,000 barrels a day and to account for 26% of total oil and gas production by the end of this year, up from 21% in 2018.

Chesapeake also expects to wring out another $200 million in cash costs this year. That reduction is expected to add 12% to 15% to EBITDA per barrel of oil equivalent, building on its $12.81 EBITDA per barrel total for last year. The company also expects capital spending to be relatively flat compared with a 2018 total of $2.39 billion.

Analysts have estimated that first-quarter EPS will come in at $0.15 on revenues of $2.2 billion. For the full year, analysts expect EPS of $0.59 and $9.42 billion in revenues. There will be some changes made soon to these numbers.

The combination of better-than-expected results with a massively upbeat forecast has warmed investors’ hearts. Shares traded up about 9% shortly after the opening bell at $2.87, above the prior 52-week range of $1.71 to $2.67. The 12-month consensus price target on the stock was $2.96 before results were announced.

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