The Oklahoma City natural gas giant on Friday offered buyouts to about 275 employees.
In a statement, company officials said its “voluntary separation program” was extended to workers who meet an unspecified criteria of age and years at the company.
Eligible employees have been given 45 days to consider the buyout. Employment would end February 2013, according to the company’s statement.
The company employs more than 13,000 people. More than 4,000 work at the company’s Oklahoma City headquarters. Chesapeake Sr. Vice President Henry J. Hood addressed the buyouts in an email reportedly received by at least some employees, The Lost Ogle reports:
As you know, the past year or so has been particularly tough on the natural gas industry. Although natural gas prices have recovered a bit, we believe the sustained low natural gas price environment we have seen will have an effect on the levels of activity in our industry and at Chesapeake for some time to come. That means we must continue to focus on initiatives designed to control expenses and maximize performance so that we are able to maintain our leadership role in this changing and competitive industry.
According to the email attributed to Hood, employees who take the buyout will get a year’s pay, a year of COBRA premiums and various stock benefits.
This news comes on the heels of Chesapeake’s $2.16 billion sale of pipeline assets, “which did little to impress analysts and investors who remain wary of the company’s progress,” FuelFix’s Zain Shauk reports:
The company has yet to sell other land assets that it planned to unload by the end of the year to help it reach a goal of cutting its long-term debt from nearly $16 billion to under $9.5 billion by the end of the year. It appears the company will fall well short of that goal, likely slashing the debt to $12 billion, according to a projection from analyst Tim Rezvan, of Sterne Agee.
Update 1: We’ve asked a Chesapeake spokesperson to verify the email attributed to Henry Hood. We’ll circle back with their response if/when we get a reply.
Update 2: From Chesapeake spokeswoman Lindsay McIntyre: “Our only comment is what is included in today’s press release.”