CHK this out.
Chesapeake Energy, the second-largest natural gas producer in the U.S., said it will be cutting its daily output by 8% per day as natural gas prices continue to fall. The cut will equate to about half a billion cubic feet per day, and helped to push the price of natural gas higher on Monday.
CEO Aubrey McClendon said, “An exceptionally mild winter to date has pressured U.S. natural gas prices to levels below our prior expectations and below levels that are economically attractive for developing dry gas plays in the U.S., shale or otherwise.”
While one analyst said the size of the cut is not meaningful, it may signify more cuts from other producers are on the way. The company is also cutting its 2012 gas-directed capital spending by ~$2 billion and its 2012 lease acquisition expense by ~$1 billion.
Canaccord Genuity Energy Analyst John Gerdes said the move should be seen positively as there is now a high probability that the company achieves its debt target of $9.5 billion at the end of 2012 while previously he was expecting year-end debt of $11.0-11.5 billion.
Chesapeake Energy (CHK : NYSE : US$22.28), Net Change: 1.32, % Change: 6.30%, Volume: 31,972,405
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