Largest US natural gas producer Chesapeake Energy cuts jobs

By Shariq Khan and Liz Hampton

(Reuters) – Chesapeake Energy, a major U.S. natural gas producer, began laying off employees this week after completing the divestment of its oil assets last year, the company said on Monday.

This week’s layoffs follow Eagle Ford’s divestiture of its assets, not the company’s pending merger with Southwestern Energy, 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, becoming a pure natural gas producer.

In early 2023, it sold some of these assets to INEOS Energy for $1.4 billion, and later that year it completed the divestment by selling the remaining assets to SilverBow Resources 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 expected to close in the second half of this year, later than initially anticipated, after the US Federal Trade Commission sought additional information.

Natural gas producers have been hit this year by low prices, which fell by around 20% in the first quarter due to high stocks and weaker-than-expected demand. Chesapeake failed to meet Wall Street estimates in terms of profit, and many companies—including Chesapeake—reduced production in response.

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

(Reporting by Liz Hampton in Denver; Editing by Stephen Coates)