Chesapeake reverses Q2 loss, plans Eagle Ford exit
US natural gas producer Chesapeake Energy said August 2 it reversed a Q2 2021 loss of $439mn with net income of $1.24bn in Q2 2022, and said it would sell its Eagle Ford shale oil assets to focus on developing shale gas in the Marcellus and Haynesville plays.
“Our acreage positions in the Marcellus and Haynesville are truly differentiated with industry leading capital efficiency, deep runways of low breakeven inventory, strong operating margins, and advantaged emissions profiles,” CEO Nick Dell’Osso said. “Given we now view our Eagle Ford assets as non-core to our future capital allocation strategy, we are increasing our capital allocation to the Haynesville in the second half of the year and into 2023 to position the asset for returns-driven growth.”
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Liquids production from the Eagle Ford averaged about 66,000 barrels/day in the second quarter.
As part of its renewed focus on gas, Chesapeake recently entered into a long-term gas supply arrangement with Golden Pass LNG to deliver 300mn ft3/day of certified natural gas to the Texas liquefaction facility starting in 2024.
Chesapeake’s legacy Marcellus production has been certified by both MiQ and Equitable Origins, and it expects production recently acquired in the Marcellus from Chief E&D Holdings and affiliates of Tug Hill will achieve certification by the end of this year. Haynesville output was certified in December 2021.
Over the last 18 months, Chesapeake has installed more than 2,000 continuous methane emissions monitoring devices and retrofitted 15,000 pneumatic devices across its operations. And all new facilities engineered today are designed to be 100% vent free using electric device technology.
Chesapeake’s Q2 natural gas production this year averaged 3.73bn ft3/day, up from just over 2bn ft3/day in the comparable 2021 quarter.