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Chesapeake Energy reports 3Q loss on charges

OKLAHOMA CITY (AP) -- Shares of Chesapeake Energy Corp. fell in after-hours trading Thursday after it posted a third-quarter loss on a 25 percent drop in revenue due in part to lower natural gas prices and one-time charges.

The Oklahoma City natural gas company lost $2.06 billion, or $3.19 per share, in the quarter that ended Sept. 30. That compares with net income of $879 million, or $1.23 per share, in the third quarter of 2011.

Chesapeake recorded several one-time items, including a $28 million non-cash, after-tax charge related to losses on sales and impairment of certain fixed assets.

Other items included a non-cash, after-tax impairment charge of $2.02 billion related to the carrying value of oil and natural gas properties and an after-tax gain of $19 million related to an investment sale. It also had an unrealized non-cash after-tax loss of $63 million on derivatives.

Excluding the special items, adjusted earnings were $33 million, or 10 cents per share.

Revenue fell to $2.97 billion from $3.98 billion.

Analysts, on average, forecast earnings of 9 cents per share on revenue of $2.71 billion, according to FactSet. Such estimates typically exclude one-time items.

Chesapeake's daily production rose 24 percent from the year-ago quarter to 4.142 billion cubic feet of natural gas equivalent. It sold natural gas at an average price of $1.97 per 1,000 cubic feet, compared with $4.82 per 1,000 cubic feet a year ago. Oil prices rose to $90.79 per barrel from $82.47 per barrel.

Chesapeake expects natural gas production to decline 7 percent next year as a result of its strategy to focus on oil and gas liquids. It predicted liquids production would increase 29 percent in 2013.

Chesapeake released its results after the markets closed. Its share price fell 19 cents to end at $20.07 and lost an additional 48 cents, or 2.4 percent, in after-hours trading. The stock has ranged from $13.32 to $29.85 per share in the past 52 weeks.