Chesapeake earnings beat expectations in wake of shift to oil Chesapeake Energy, the second-largest producer of natural gas in the US, reported earnings well above analysts" estimates for the first quarter of 2013, thanks to its shift into more lucrative oil production. Crude oil output rose 56 per cent from the equivalent period of 2012 to 103,000 barrels per day, helping earnings excluding unrealised derivative gains and other one-off items rise 95 per cent to $183m. Underlying earnings per share, excluding those items, were up 67 per cent at 30 cents, well ahead of the average of analysts" forecasts of 24 cents. However, shares in the company fell 2 per cent to $19.14 in early trading in New York. Chesapeake also said it had "multiple" asset sales "in advanced stages of negotiation" as it continues to work to reduce its debt burden. It has already announced disposals to raise $2bn this year, including the $1bn sale of oilfields in the Mississippi Line region of Oklahoma and Kansas to Sinopec of China, and has a target of raising between $4bn and $7bn in 2013. Assets up for sale include oilfields in the Eagle Ford shale in Texas, one of the hottest areas for the new US oil boom, some pipeline and storage facilities not sold when Chespeake offloaded most of its midstream business last year and "other non-core properties." Steven Dixon, who has been Chesapeake's acting chief executive since Aubrey McClendon, the company's co-founder, stepped down at the start of April, said he expected to announce deals for those assets during the second quarter. The first-quarter results showed that the company was beginning to see the benefits of its strategic shift from acquiring new drilling leases to developing the leases it already owns, he said, saying Chesapeake was "entering a new era of shareholder value realisation." He added that past investment in infrastructure such as roads, well pads - patches of ground cleared and prepared for drilling and production - connecting pipelines and processing facilities meant that the company could now produce more efficiently and make higher returns. Chesapeake has cut its capital spending on drilling and completing wells sharply from $2.5bn in the first quarter of 2012 to $1.6bn in the first quarter of 2013. It is also selling some producing oilfields. However, it expects to be able to sustain its oil production at first-quarter levels, averaging about 104,000 barrels per day for the year as a whole. Mr Dixon said the company had raised its guidance for expected oil production this year by about 3 per cent because of good results in the Eagle Ford shale, where Chesapeake's output has more than tripled over the past year.