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The U.S. oil and gas company’s profit fell to $391 million, or $2.73 per share, in the quarter ended June 30, from $1.24 billion, or $8.27 per share, from a year earlier.
U.S. natural gas prices averaged $2.417 per million British thermal units (Btu) in the April-June quarter, nearly 63% down from a year ago, when demand surged against the backdrop of Russia’s invasion of Ukraine.
Relatively mild temperatures and higher inventories had also dented natural gas prices.
In May, the company said it anticipated volatility in natural gas markets to persist, and that it could hold off bringing some wells online if low prices continue.
Chesapeake’s quarterly net production was down 11.6% at 3.65 billion cubic feet equivalent per day from a year earlier, of which 96% accounted for natural gas and 4% was total liquids.
The number of rigs drilled for natural gas in the United States fell by 36 to 124 in the second quarter, according to data from oil services firm Baker Hughes.
However, on an adjusted basis the company earned 64 cents per share, beating analysts’ average estimate of 42 cents, according to Refinitiv data.
Chesapeake expects to drill 30 to 40 wells and place 40 to 50 wells in the third quarter of 2023.
Chesapeake entered into a new agreement with Energy Transfer (NYSE:ET)’s Lake Charles LNG to supply natural gas to produce 1 metric tonnes per annum of Liquefied Natural gas (LNG). This LNG would be bought by trading firm Gunvor Group.
