Chesapeake Scales Back Its Dry Gas Drilling Operations
Here’s a sign reduced natural gas prices are having an impact on production: Chesapeake Energy is scaling back its drilling operations.
The Central Penn Business Journal reports:
Chesapeake Energy Corp. plans to reduce its dry gas rig count from 75 in 2011 to 24 by the second quarter, the company said in a statement. Half will operate in the Marcellus Shale, and six each in the Haynesville and Barnett shales in the Gulf Coast states, the Oklahoma City-based company said.
Chesapeake also will reduce investment in dry gas production from $3.1 billion in 2011 to $900 million this year, and will reduce daily production immediately by 8 percent, or half a billion cubic feet, it said. Chesapeake will lower production an additional 8 percent, if needed. The company accounts for about 9 percent of total U.S. production.
Chesapeake said it plans to shift resources to wet-gas plays. Unlike dry gas, which is solely a fuel, wet gas byproducts provide valuable feedstock to the chemical and plastics industries.
According to our Shale Play app, Chesapeake operates more than 100 producing Marcellus Shale wells in Pennsylvania.