(Reuters) – Natural gas producer Chesapeake Energy Corp (NYSE:) missed Wall Street’s first-quarter profit forecasts on Tuesday as persistently low prices weighed on the company’s financial results.
Natural gas prices fell 20.4% in the first quarter from the year-ago quarter as high inventories coupled with weak demand led producers such as Chesapeake to cut gas production.
The company said it plans to place an additional rig at Marcellus around mid-year.
Chesapeake Energy said it expects total natural gas production in the second quarter to be between 2,620 million cubic feet of gas equivalent per day (MMcf/d) and 2,720 MMcf/d, down from 3,653 MMcf/d. registered in the previous year’s quarter.
The Oklahoma company is also moving forward with a previously disclosed plan to delay the start-up of completed production wells, citing continued weak market performance. The company added that it plans to activate the production capacity of these wells when the imbalance in supply and demand is resolved.
Chesapeake Energy joined peers APA Corp and EQT Corp (NYSE:) to cut costs and natural gas production this year and said in February it sees the market as “oversupplied.”
The company reported adjusted earnings of 56 cents per share for the three months ended March 31, compared with analysts’ average estimate of 60 cents per share, according to LSEG.
Chesapeake, which is on the cusp of becoming the largest natural gas producer pending its acquisition of Southwestern Energy (NYSE:), reported quarterly net production of 3.20 billion cubic feet equivalent per day (bcfepd), using an average of nine rigs .
remove advertising
.