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Top U.S. natural gas producer Chesapeake Energy cuts jobs

Published 05/20/2024, 08:04 PM
Updated 05/21/2024, 01:55 AM
© Reuters. FILE PHOTO: A 3D printed oil barrels and oil pump jack are seen in front of displayed Chesapeake Energy logo in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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By Shariq Khan and Liz Hampton

(Reuters) - Chesapeake Energy (NYSE:CHK), a top U.S. natural gas producer, began laying off employees this week after completing the divestiture of its oil assets last year, the company said on Monday.

This week's layoffs follow its divestment of its Eagle Ford (NYSE:F) assets, not the company's pending merger with Southwestern Energy (NYSE:SWN), Chesapeake said.

The company did not specify the size or scope of the layoffs.

Chesapeake in 2022 said it would exit the Eagle Ford shale field in south Texas, making it a pure-play natural gas producer.

In early 2023 it sold some of those assets to INEOS Energy for $1.4 billion, and later that year completed the divestiture by selling the remaining assets to SilverBow Resources (NYSE:SBOW) for $700 million.

The Oklahoma City, Oklahoma-based company is in the process of completing a $7.4 billion merger with Southwestern Energy. That deal is set to close in the second half of this year, later than originally anticipated after U.S. Federal Trade Commission sought additional information.

© Reuters. FILE PHOTO: A 3D printed oil barrels and oil pump jack are seen in front of displayed Chesapeake Energy logo in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Natural gas producers have been hit this year by low prices, which fell some 20% in the first quarter due to high inventories and softer-than-expected demand. Chesapeake missed Wall Street estimates for profit, and many companies - including Chesapeake - have curtailed production as a response.

As part of that deal, the company will replace current General Counsel Benjamin Russ with Southwestern General Counsel Chris Lacy, according to a regulatory filing on May 7.

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