Chesapeake Energy Up 6% After Announcement to Cut Natural Gas Production
Chesapeake Energy (NYSE: CHK) is up nearly 6% today after the company announced that it planned to cut natural gas production.
Chesapeake plans to further reduce its operated dry gas drilling activity by 50% to approximately 24 rigs by the 2012 second quarter from 47 dry gas rigs currently in use and by 67% from an average of approximately 75 dry gas rigs used during 2011. Chesapeake's operated dry gas drilling capital expenditures in 2012, net of drilling carries, are expected to decrease to $0.9 billion, a decrease of approximately 70% from similar expenditures of $3.1 billion in 2011.
This anticipated level of dry gas drilling capital expenditures is the company's lowest since 2005. Specifically, during the 2012 second quarter, Chesapeake plans to have reduced its drilling activity in both the Haynesville and Barnett shales to six operated rigs each and to 12 operated rigs in the dry gas area of the Marcellus Shale in northeastern Pennsylvania.
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