Chesapeake Energy Corporation (NYSE:CHK.PRD) Q3 2016 Earnings Conference Call - Preliminary Transcript
Nov 03, 2016 • 09:00 am ET
Good day and welcome to the Chesapeake Energy Corporation Q3 2016 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brad Sylvester. Please go ahead.
Thank you, Ashley. Good morning everyone, and thank you for joining our call today to discuss Chesapeake's financial and operational results for the 2016 third quarter. Hopefully you've had a chance to review our press release and the updated investor slides that we posted to our website this morning. During this morning's call, we will be making forward-looking statements which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs, goals, expectations, forecasts, projections and future performance and the assumptions underlying such statements.
Please note that there are a number of factors that will cause actual results to differ materially from our forward-looking statements, including the factors identified and discussed in our earnings release today and in other SEC filings. Please recognize that, except as required by applicable law, we undertake no duty to update any forward-looking statements and you should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers.
For any non-GAAP measures we use, a reconciliation to the nearest corresponding GAAP measure can be found on our website and in our earnings release. With me on the call today are Doug Lawler, Nick Dell'Osso, Frank Patterson, and Jason Pigott. Doug will begin the call and then we'll turn the call over to Nick for a review of our financial results before we turn the teleconference over to Q&A. So, with that, thank you again. And I will now turn the teleconference over to Doug.
Thank you, Brad, and good morning. Over the past year, we've continued to make significant progress in building a stronger Chesapeake for the future. During our Analyst Day held a few weeks back here in Oklahoma City, we highlighted the strength in our asset base, technology and expertise. To briefly summarize, the financial and operational improvements of the company over the past few years are foundational and differential.
We've reduced our total leverage by $10.9 billion, reduced cash cost by roughly 50%, substantially improved capital efficiencies and productivity and materially improved midstream gathering cost, all to build a more competitive, profitable Chesapeake that we forecast in 2018 to achieve free cash flow neutrality and the ability to generate more than $3 billion in EBITDA. All this progress has been made despite depressed commodity prices. At our Analyst Day, we released significant technical detail regarding the potential of our oil and gas portfolio, notably, the estimated net recoverable resources of 11.3 billion barrels of oil equivalent. We provided a roadmap that highlights the opportunity for profitable and efficient growth through our captured resources over time along with projected financial results through the end of the decade under certain reasonable price assumptions.
I'd like to update you today on