(Reuters) - Chesapeake Energy Corp’s shares rose 10 percent on Wednesday after the company reported a better-than-expected quarterly profit and said it expects to produce more crude oil in 2019 on the back of its recent acquisition of WildHorse Resource.
The company, which agreed to buy Texas oil producer WildHorse in a $4 billion deal in October, has been focusing on producing more oil over natural gas to benefit from improved prices.
Chesapeake said it expects oil production of 116,000 to 122,000 barrels per day (bpd) in 2019. Analysts were expecting 120,200 bpd, according to IBES data from Refinitiv.
“Our strategic focus on increasing our oil production is working,” Chief Executive Officer Doug Lawler said in a statement.
Chesapeake, which operates in the Eagle Ford basin in south Texas and the Anadarko basin in northwestern Oklahoma, said it produced about 464,000 barrels of oil equivalent per day (boepd) in the fourth quarter, down 22 percent from a year earlier.
The company now expects crude oil to constitute about 24 percent of its total volumes in 2019, compared to just 17 percent in 2018.
Net income available to shareholders jumped 57 percent to $486 million, or 49 cents per share, in the fourth quarter ended Dec. 31.
On an adjusted basis, the company earned 21 cents per share, beating the average analyst estimate of 19 cents, according to IBES data from Refinitiv.
Chesapeake’s shares were up at $2.89 before the opening bell. Short interest in the stock has climbed to a two-year high of about 26 percent of the company’s outstanding shares as of end-January, according to Refinitiv data. Short sellers borrow and sell shares and, when prices fall, buy and return them, pocketing the difference.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Maju Samuel