OKLAHOMA CITY — Chesapeake Energy Corporation expects total capital expenditures to range from $5.2 – $5.6 billion, the company announced in its 2014 outlook Feb. 6.

On an absolute basis, Chesapeake is estimating 2014 production growth of 2 to 4 percent, targeting an average daily production rate of 680,000-695,000 barrels of oil equivalent.

Estimated per-unit production and general and administrative expenses are expected to decline 10% and 25%, respectively, year over year.

Production outlook

According to Doug Lawler, Chesapeake’s chief executive officer, Chesapeake is budgeting total capital expenditures in the range of $5.2 to $5.6 billion in 2014, which represents a 20 percent reduction from the midpoint of Chesapeake’s 2013 capital expenditure outlook.

After adjusting for 2013 asset sales, the company expects to generate 8-10% year-over-year production growth in 2014, consisting of 8-12% oil production growth, 44-49% natural gas liquids production growth and 4-6% natural gas production growth.

Chesapeake plans to spud approximately 1,100 gross operated wells in 2014, which is relatively unchanged from 2013 activity levels.

The company plans to connect approximately 1,300 gross operated wells to sales in 2014, or approximately 115 fewer wells than in 2013.

Cost overview

As a result of ongoing cost control initiatives, Chesapeake anticipates lower per-unit production and general and administrative (G&A) expenses in 2014.

Production expenses are expected to range from $4.25 to $4.75 per barrel of oil equivalent (boe). G&A expenses (excluding restructuring and other termination benefits) are estimated to be $1.35 – $1.60 per boe, down approximately 25% year over year.

“While our guidance today does not reflect the impact of potential divestitures, we continue to pursue opportunities to high-grade our portfolio through asset sales,” Lawler said.

“Over the last eight months, we have conducted an extensive review of Chesapeake’s portfolio. Due to the size and quality of the asset base, I am confident that by remaining focused on our strategic priorities we can deliver long-term production growth per debt-adjusted share of 5 to 9 percent annually, while maintaining a disciplined capital spending profile.”