Business Analysis of Chesapeake Energy

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Chesapeake Energy

CHESAPEAKE ENERGY

Business Overview

Chesapeake Energy Corporation engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids (NGL) from underground reservoirs in the United States. It operates in two segments, Exploration and Production; and Marketing, Gathering, and Compression. The company holds interests in natural gas resource plays, including the Haynesville/Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin in Pennsylvania. It also holds interests in liquids-rich resource plays, such as the Eagle Ford Shale in South Texas; the Utica Shale in Ohio; the Anadarko Basin in northwestern Oklahoma; and the stacked pay in the Powder River Basin in Wyoming. The company owns interests in approximately 22,700 oil and natural gas wells. As of December 31, 2016, it had estimated proved reserves of 1.708 billion barrels of oil equivalent. The company also provides oil, natural gas, and NGL marketing services comprising commodity price structuring, securing and negotiating gathering, hauling, processing and transportation, contract administration, and nomination services for Chesapeake-operated wells; and marketing services for third-party producers, as well as designs, engineers, fabricates, installs, and sells natural gas compression units, accessories, and equipment used in the production, treatment, and processing of oil and natural gas. Chesapeake Energy Corporation was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.

Chesapeake Energy

Chesapeake Energy


R&P Rank: 348
Sector: Oil & Gas
Industry:Oil & Gas Production
H.Q Location:Oklahoma
Website: www.chk.com
Company Address:
6100 N WESTERN AVE, OKLAHOMA CITY OK 73118
Ph:405-848-8000

Business Analysis of Chesapeake Energy

The Oil & Gas Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Chesapeake Energy compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Chesapeake Energy to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Chesapeake Energy with an interactive chart.

  1. Revenue Growth: Chesapeake Energy reported a revenue growth of -38.3% year-on-year during 2016. Oil & Gas Production Industry grew at -15.5% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Chesapeake Energy spent 94.2% of its total revenues on COGS. Oil & Gas Production industry average (COGS share of revenue) in the same period was 78.0%
  3. R&D share of Revenues: Chesapeake Energy R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Chesapeake Energy spent 3.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Oil & Gas Production industry average SG&A spending in the same period was 4.3%
  5. Inventory share of Revenues: Chesapeake Energy Inventory share of Revenues details are not available because either company does not share the data or we do not have it
  6. Accounts Payable share of Revenues: As a percentage of revenue, Chesapeake Energy invested 8.5% of its total revenues on Accounts Payable (A/P) Oil & Gas Production industry average Accounts Payable investment in the same period was 12.4%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Chesapeake Energy invested 13.4% of its total revenues on Accounts Receivable (A/R). Oil & Gas Production industry average Accounts Receivable investment in the same period was 10.5%
  8. PP&E share of Revenues: As a percentage of revenue, Chesapeake Energy invested 134.8% of its total revenues on Property, Plants, and Equipments (PP&E). Oil & Gas Production industry average PPE investment in the same period was 132.9%
  9. Intangibles share of Revenues: Chesapeake Energy Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
  10. Net Margins: Chesapeake Energy Net Margins in the year 2016 were -55.9%. Oil & Gas Production industry average Net Margins in the same period were -4.2%

Sector and Industry Association of Chesapeake Energy

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Chesapeake Energy is associated with Oil & Gas Sector and Oil & Gas Production Industry.

Oil & Gas sector is comprised of the following industries: Oil & Gas Production; Oil & Gas Distribution; Oil & Gas Equipment and Services; Alternative Energy. The definitions for each of the industries is as follows:

  • Oil & Gas Production industry includes companies primarily engaged in operating oil & gas properties. Key activities may include exploration for crude petroleum and natural gas; drilling, completing, and equipping wells; and all other activities in the preparation of oil and gas up to the point of shipment from the producing property. It also includes companies engaged in crude petroleum refining and producing gasoline, kerosene, distillate fuel oils, residual fuel oils, and lubricants, through fractionation or straight distillation of crude oil.
  • Oil & Gas Distribution industry includes companies primarily engaged in the pipeline transportation of petroleum, natural gas, and other commodities. It also includes companies primarily engaged in the wholesale and retail distribution of petroleum and petroleum products.
  • Oil & Gas Equipment and Services industry includes companies primarily engaged in drilling wells for oil or gas field operations for others on a contract or fee basis. It also includes companies providing exploration services and machinery & equipment for oil and gas field operations.
  • Alternative Energy industry includes companies that develop or manufacture renewable energy equipment utilizing sources such as solar, wind, geothermal, hydro, and waves. It also includes companies that produce alternative fuels such as methanol, ethanol, hydrogen and biofuels that are mainly used to power vehicles.

Industry Ranking of Chesapeake Energy

With $7.9 billion revenues, Chesapeake Energy ranked number 13 of all the companies in the US Oil & Gas Production industry. There were a total of 89 public companies in the US Oil & Gas Production industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Oil & Gas Production industry by revenues during 2016 were:

  1. ExxonMobil ($226.1 billion)
  2. Chevron ($114.5 billion)
  3. Phillips 66 ($85.8 billion)
  4. Valero Energy ($75.7 billion)
  5. Marathon Petroleum ($63.4 billion)
  6. Imperial Oil ($27.4 billion)
  7. Tesoro ($24.6 billion)
  8. ConocoPhillips ($24.4 billion)
  9. PBF Energy ($15.9 billion)
  10. Devon Energy ($12.2 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Chesapeake Energyand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of chesapeake-energy

Devon Energy (DVN) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Devon Energy Corp with $12 billion revenues in the year 2016 was the number 10 Oil & Gas Production company. Read this report to know the top competitors of Devon Energy and identify growth and cost optimization opportunities of Devon Energy

HollyFrontier (HFC) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

HollyFrontier Corp with $11 billion revenues in the year 2016 was the number 11 Oil & Gas Production company. Read this report to know the top competitors of HollyFrontier and identify growth and cost optimization opportunities of HollyFrontier

Occidental Petroleum (OXY) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Occidental Petroleum Corp with $10 billion revenues in the year 2016 was the number 12 Oil & Gas Production company. Read this report to know the top competitors of Occidental Petroleum and identify growth and cost optimization opportunities of Occidental Petroleum

Anadarko Petroleum (APC) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Anadarko Petroleum Corp with $8 billion revenues in the year 2016 was the number 14 Oil & Gas Production company. Read this report to know the top competitors of Anadarko Petroleum and identify growth and cost optimization opportunities of Anadarko Petroleum

Western Refining (WNR) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Western Refining, Inc. with $8 billion revenues in the year 2016 was the number 15 Oil & Gas Production company. Read this report to know the top competitors of Western Refining and identify growth and cost optimization opportunities of Western Refining

EOG Resources (EOG) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

EOG Resources Inc with $8 billion revenues in the year 2016 was the number 16 Oil & Gas Production company. Read this report to know the top competitors of EOG Resources and identify growth and cost optimization opportunities of EOG Resources

Revenues Analysis

Chesapeake Energy (CHK) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Chesapeake Energy Corp (CHK) from 2012 to 2016. Chesapeake Energy generated a total of $7.9 billion revenues during 2016. Chesapeake Energy reported a revenue growth of -38.3% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Chesapeake Energy (CHK) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Chesapeake Energy Corp (CHK) from 2002 to 2016. Chesapeake Energy generated a total of $7.9 billion revenues during 2016. Chesapeake Energy reported a revenue growth of -38.3% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Chesapeake Energy (CHK) Revenue Growth Comparison With Industry Growth From 2012...

This report provides a comparison of Chesapeake Energy Corp (CHK) revenue growth with Oil & Gas Production industry growth during the last five years from 2012 to 2016. Chesapeake Energy reported a revenue growth of -38.3% year-over-year during 2016. The Oil & Gas Production industry growth was -15.5% year-over-year during 2016. Chesapeake Energy growth was slower than the industry during 2016.

Profit Analysis