Shariq Khan and Liz Hampton
(Reuters) – Chesapeake Energy (NYSE:), the leading U.S. oil producer, began laying off employees this week after completing the sale of its oil assets last year, the company said on Monday.
This week’s layoffs follow the sale of Eagle Ford (NYSE:) assets and not the company’s pending merger with Southwestern Energy (NYSE:), Chesapeake said.
The company did not specify the size and scope of the layoffs.
In 2022, Chesapeake said it would exit the Eagle Ford shale play in south Texas, turning it into a clean natural gas producer.
It sold a portion of these assets to INEOS Energy for $1.4 billion in early 2023 and completed the sale later that year by selling the remaining assets to INEOS Energy. SilverBow Resources (NYSE:) for $700 million.
The Oklahoma City, Okla.-based company is completing a $7.4 billion merger with Southwestern Energy. The deal is expected to be completed in the second half of this year, later than originally expected, after the US Federal Trade Commission requested more information.
Natural gas producers have been hit by low prices this year, falling about 20% in the first quarter due to high inventories and weaker-than-expected demand. Chesapeake missed Wall Street earnings estimates, and many companies, including Chesapeake, cut production in response.
As part of the deal, the company will replace current general counsel Benjamin Russ with Southwest general counsel Chris Lacy, according to a May 7 regulatory filing.