Shares in Chesapeake Energy Corp. surged as much as 24% in morning trading Feb. 22 after the company's fourth-quarter and full-year 2017 results beat analysts' expectations and executives promised positive cash flows while reducing spending and debt.

Heavy buying of Chesapeake's shares drove their price as high as $3.25 as of 11:20 a.m. ET on Feb. 22.

Although much of the fourth quarter's results were pre-released Feb. 6, better realized prices for oil, natural gas and NGLs drove Chesapeake's profit past expectations. Chesapeake reported adjusted fourth-quarter profits of $314 million, 30 cents per share, almost five times the fourth-quarter 2016 adjusted profit and beating S&P Global Market Intelligence's analyst consensus of 25 cents per share.

"Given a healthy 4Q beat on realizations (all three streams) and an unchanged '18 outlook relative to prior guidance, we expect [Chesapeake] shares to catch a bid today after a tough start to '18 (-25% MTD, -34% YTD)," Mizuho Americas LLC oil and gas analyst Tim Rezvan said before the earnings conference call. "With that said, today's encouraging results should show that both organic (realizations) and inorganic (asset sales) improvements are ongoing and bear monitoring in the absence of the transformational $2 billion or more sale we believe is necessary."

While Chesapeake CEO Doug Lawler told analysts on the call that the company would extinguish another $2 billion to $3 billion in debt in 2018 while reducing capital spending 12% to the $2 billion range, he only hinted about the possibility of selling off a major play.

"It's very heavily price-dependent," Lawler said after noting that he was not going to sell valuable leases for half price. "As we look at our portfolio, as we look at further opportunities to tighten and core up in areas, there will be further smaller incremental asset sales that we will pursue. We have a very large asset base, so those are options that we can always look to and always find strategic or smaller buyers, private equity, that are looking for trying to build an asset position in an area where we may not get to that area for a long period of time."

The next big buyer of a Chesapeake natural gas play, CFO Domenic Dell'Osso hinted, will have a connection to global markets, presumably through an LNG terminal. "One thing that I would note for you is that there is some increasing interest around some gas assets from what I would think of as strategic and maybe nontraditional participants in the standard U.S. onshore [acquisition and divestiture] market," Dell'Osso told analysts. "The recognition of the fact that there is real financial return to be created in these assets and that there are some encouraging long-term supply-demand dynamics by some participants in the market, particularly those that might be connected to world markets, is real."

Nonetheless, Jefferies LLC analyst Mark Lear thought the quarterly announcement did not compare favorably to previous company announcements, without a big asset sale to trumpet. "Negative. [Chesapeake] reported an EPS beat on higher pricing and lower operating costs, while also guiding 2018 growth to 1-5% (adjusted for asset sales which garnered $500 million of proceeds)," Lear said before the earnings conference call. "With the slides mentioning positive free cash when including asset sales, we would suspect that caveat is key. This compares to a late 2016 analyst day calling for 10-15% 2018/17 growth on a cash flow neutral program."

Chesapeake's latest 2018 guidance is for 1% to 5% production growth with a 12% reduction in capital spending. The company will be cash flow positive in 2018, executives said, by adding in $500 million worth of assets sales earlier in 2018 in the Mississippian Lime of northern Oklahoma.

For the full year 2017, Chesapeake reported adjusted income of $742 million, or 82 cents per share, compared to $1 million in 2016 losses, and beating analysts' expectations of 76 cents per share, according to S&P Global Market Intelligence's consensus.