Chesapeake Energy booked a net loss of $227 million for the second quarter of the year on persistently low natural gas prices and lower production.
The result compared with a profit of $391 million for the second quarter of 2023.
Like other gas producers, Chesapeake has suffered a blow from lower energy demand last winter, which pressured prices significantly. In response, the gas industry began curtailing production and deferring new wells, which also affected Chesapeake's bottom line.
"We continue to execute our business as we prudently manage current market conditions and prepare for our pending combination with Southwestern. We remain focused on operational improvements and enhancing capital efficiency," chief executive Nick Dell'Osso said.
Chesapeake Energy, which went through bankruptcy in 2020 when oil and gas prices crashed, has been solidifying in the past year its strategic focus on its gas assets in the Marcellus shale in Appalachia and in the Haynesville shale play in Louisiana while reducing its Eagle Ford position where it held oil assets.
Earlier this year, the company said it would merge with Southwestern Energy, to create the biggest natural gas producer in the United States. The all-stock deal was valued at some $7.4 billion. The finalization of the deal was earlier this year delayed to the second half, after the Federal Trade Commission requested additional information about the deal from the two companies.
The short-term outlook for gas producers remains somewhat depressing but over the long term, demand prospects are a lot better due to the expected increase in electricity demand from data centers and the lack of alternatives to gas-fired power generation and its round-the-clock supply.
Natural gas-fired electricity generation in the United States has jumped year-to-date compared to the same period last year, as total power demand rose with warmer temperatures and demand from data centers.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More