By Liz Hampton
DENVER (Reuters) -U.S. shale gas producer Chesapeake Energy on Wednesday said it anticipated volatility in natural gas markets to persist, and that it could hold off bringing some wells online if low prices continue.
Chesapeake said it had opted to conduct some maintenance in the Haynesville shale while gas prices were low. It also warned that it was seeing a pullback in third-party well proposals and that it anticipated a slowdown in non-operated activity.
U.S. natural gas prices fell some 50% this year, prompting energy companies to refocus some activity on oilier basins. Henry Hub futures were trading around $2.153 per million British thermal units (mmBTU) on Wednesday morning, down 2.7%, while shares of Chesapeake were down 2.5% to $78.13.
“As we go through the summer months there is going to be plenty of volatility in the market,” Chief Executive Nick Dell’Osso told investors.
The decline in activity was leading to a softening of service costs, which had jumped in the past year amid limited capacity, the company said.
Chesapeake continues to hold talks with third parties about selling the remainder of its Eagle Ford assets in South Texas, it said on Wednesday. Dell’Osso warned, however, that deal-making for gas assets had become “hard” given the weak market.
(Reporting by Liz Hampton in Denver; editing by Jonathan Oatis)
