Oil and gas producer Chesapeake Energy Corp. (NYSE: CHK) said on Jan. 30 it had cut 400 jobs or about 13% of its workforce in its latest step to reduce costs.
The job cuts affected most functions and were mainly limited to Chesapeake’s headquarters in Oklahoma City, according to an email sent by CEO Doug Lawler to employees.
The move comes amid efforts by Chesapeake to raise cash in order to reduce its $9.9 billion debt load and shore up its balance sheet. As part of those efforts, the company is selling assets worth $2 billion to $3 billion and is expected to cut its 2018 capital expenditure.
Chesapeake, which makes more than half of its revenue from selling natural gas, has been pressured by low gas prices.
Prices will likely fall further as U.S. natural gas production is forecast to increase by 6.9 billion cubic feet per day in 2018, the highest year-on-year increase on record, according to the EIA.
“[The job cuts are] not a big surprise,” said Timothy Rezvan, an analyst at Mizuho Securities USA. “But the headcount does give you a lot of insight into the company’s activity in 2018, which we think will be pretty low.”
Shares of Chesapeake were down 5.4% at $3.67 on the afternoon of Jan. 30 amid a decline in oil prices.
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