Chesapeake Energy Corp. (NYSE: CHK), the largest natural gas producer in the US, is cutting its gas production again, bringing the total reduction to about 400 million cubic feet/day. That total includes a 200 million cubic feet/day reduction announced on March 2nd.
In addition to the cuts in Mid-Continent and Barnett Shale production, Chesapeake will throttle new wells in the Barnett and Fayetteville plays to 2 million cubic feet/day and new wells in the Marcellus and Haynesville plays to 5 and 10 million cubic feet/day, respectively. That’s a lot of gas.
According to Chesapeake’s CEO, cuts to drilling and natural depletion “will work to rebalance US natural gas markets by late 2009 or in early 2010.” That prediction is based on an assumption that the economy as a whole will begin to recover and gas production continues to decline.
Other large gas producers, such as Duke Energy Corp. (NYSE:DUK) and XTO Energy Inc. (NYSE:XTO), have not announced similar reductions.
Chesapeake shares have more than doubled from their 52-week low of $9.84, closing yesterday at $20.94. Shares are down less than 1% in pre-market trading this morning. There has been no action on Duke or XTO so far this morning.
Paul Ausick
April 17, 2009
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