((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Added perspectives and context in paragraphs 4-6)
Natural gas producer Chesapeake Energy Corp CHK.O missed Wall Street estimates for first-quarter profit on Tuesday as continued weakness in natural gas prices weighed on the company’s results.
NGc1 natural gas prices fell 20.4% in the first quarter from a year earlier as high inventories combined with lackluster demand prompted producers such as Chesapeake to cut gas production.
The company said it plans to install an additional rig in the Marcellus area around mid-year.
Chesapeake Energy said it expects total natural gas production for the second quarter to range from 2,620 million cubic feet of gas equivalent per day (mmcfepd) to 2,720 mmcfepd, which is lower than the 3,653 mmcfepd reported in during the quarter of the previous year.
The Oklahoma-based company is also implementing its previously announced plan to delay production from completed wells, citing continued weak market dynamics. It added that it plans to activate the production capacity of these wells when the imbalances between supply and demand are corrected.
Chesapeake Energy joined peers APA Corp
APA.O and EQT Corp EQT.N to cut spending and production of natural gas this year and said in February that it considered the market to be “oversupplied.”
The company’s adjusted profit was 56 cents per share for the three months ending March 31, compared with analysts’ average estimate of 60 cents per share, according to LSEG data.
Chesapeake, which is poised to become the largest natural gas producer after its acquisition of Southwestern Energy SWN.N, reported net quarterly production of 3.20 billion cubic feet equivalent per day (bcfepd), using in average nine platforms.
