After selling oil assets, Chesapeake Energy cuts jobs.

Following the divestiture of its oil holdings in 2023, the US-based natural gas business Chesapeake Energy began laying off employees this week,  

It should be noted that the impending merger with Southwestern Energy has nothing to do with the layoffs. To focus on producing natural gas, Chesapeake Energy said in 2022 that it would be leaving the Eagle Ford shale area.  

The divestiture was finalized when the business sold the remaining assets to SilverBow Resources for $700 million after selling a portion of them to INEOS Energy for $1.4 billion (£1.1 billion). Chesapeake Energy and other natural gas producers have had a rough go of it this year since prices are so low.

Prices fell 20% in the first quarter as a result of higher-than-anticipated inventory levels and weaker-than-anticipated demand. Wall Street's profit forecasts were missed by Chesapeake Energy and many other companies in the industry, leading to a reduction in production.  

From an anticipated 3.6 bcf/d in 2023, the corporation intends to decrease production to around 2.7 bcf/d in 2024. In 2023, liquids will make up 5% of the anticipated output, while natural gas will make up approximately 95%.  

Chesapeake Energy and Southwestern Energy, both based in Oklahoma City, are now merging for a total of $7.4 billion. But because a US regulator has asked for further information twice, the merger will not happen until later this year.  

Closing is expected in the second quarter of 2024, according to Chesapeake Energy, who announced the transaction in January. An energy firm with substantial assets in the Appalachia and Haynesville basins is likely to be formed as a result of the proposed merger with Southwestern Energy.

With a natural gas-heavy portfolio, the combined business is expected to produce roughly 7.9 billion cubic feet equivalent per day. An article titled "Chesapeake Energy initiates lay-offs following oil assets divestiture" was first published by Offshore Technology, a brand owned by GlobalData.