Chesapeake To Undergo Extensive Restructuring, Including Job Cuts

Chesapeake To Undergo Extensive Restructuring, Including Job Cuts

Chesapeake Energy Corporation (NYSE:CHK) discussed the ongoing restructuring strategy of the second largest natural gas producer in the United States with analysts who attended that Deutsche Bank Leveraged Finance Conference in Scottsdale, Arizona.

Chesapeake To Undergo Extensive Restructuring, Including Job Cuts

Jeff Mobley, senior vice president of Investor relations of Chesapeake Energy Corporation (NYSE:CHK) said the leadership of the company is focusing on a drastically different strategy on returns. He emphasized that all the key elements necessary for the success of its strategy are in place.

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According to him, Robert Douglas Lawler, chief executive officer of Chesapeake Energy Corporation (NYSE:CHK) is expected to complete the comprehensive review on the structure of the company by November 1. Lawler succeeded Aubrey McClendon who was forced to resign from his position in June because of controversies surrounding the energy company.

Mobley said, “We expect to have that review largely, if not entirely, complete by November 1 and we really looked at every aspect of the company.”

According to him, the management of Chesapeake Energy Corporation (NYSE:CHK) evaluated the different aspects of the company’s business from its organizational structure, lease operating expenses (LOE), and field operations approach. The management also reviewed the portfolio and financial planning process as well as the non-core affiliates of the oil and natural gas producer.

Mobley said, “What we’re trying to do is reposition the company in a way that is much more efficient.”

Chesapeake terminated 86 employees

As part of its restructuring efforts, Chesapeake Energy Corporation (NYSE:CHK) terminated 86 employees and abolished its seven-person natural gas vehicle team last month. In August, the company ousted its four senior executives including its former chief operating officer Steve Dixon.  The oil and natural gas producer is preparing a mass layoffs and notices had been sent to affected employees. According to reports, Chesapeake will cut 500 jobs at its Oklahoma City Campus Facility.

Based on the annual report of Chesapeake Energy Corporation (NYSE:CHK) in March, the company has 12,000 employees. According to Mobley, the exploration and production business of the company has 6,000 employees.

Mobley added that the Chesapeake Energy Corporation (NYSE:CHK) has the best assets to succeed. “Focusing on profitable and efficient growth, we’ve got great cards to work with. We got world-class inventory in some of the best plays, such as the Marcellus Shale, the Eagle Ford Shale, the emerging Utica Shale play, as well as underpinned by world-class gas assets, particularly in the Haynesville Shale. They are fantastic reservoirs.”

Chesapeake is operating 61 drilling rigs

Furthermore, Mobley said, “We’ve reached that inflection point with the vast majority of our core leasehold and the very best plays, largely held by production or a near term plan to be held by production very soon, and so we can rapidly shift towards improving efficiencies.”

Currently, Chesapeake Energy Corporation (NYSE:CHK) is operating 61 drilling rigs. The company previously operated 175 drilling rigs.

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