By BEN LEFEBVRE
Chesapeake Energy said it plans to more than double its oil
and liquids production by 2015 as the natural gas giant aims to
become one of top five US oil producers.
Chesapeake and other oil and gas companies are fleeing natural
gas fields amid a supply glut that has brought prices to low
levels not seen in years.
Chesapeake said it plans to produce about 250,000 bpd of oil
and natural gas liquids (NGLs) by 2015, up from about 104,000
bpd in the fourth quarter.
Chesapeake said it plans to increase its activities in the
increasingly important oil and gas fields in the Eagle Ford
region of south Texas and the Utica shale formation in the
Midwest and Northeast.
In the Eagle Ford, Chesapeake has 178 producing wells and a
backlog of 200 more, the company said.
The Oklahoma City-based company plans to have 20 rigs
operating in the Utica shale this year, up from eight in
Chesapeake said it would finance its expansion into relatively new oil
fields by selling some or all of its 1.5 million net acres in
the Permian Basin in west Texas and New Mexico.
Chesapeake said it also hopes to announce a joint venture
this summer focused on its acreage in the Mississippi Lime oil
and gas field in Oklahoma and Kansas.
"On the oil side, we hope to have some breakthroughs this
year," Chesapeake CEO Aubrey McClendon said during a conference
call with investors.
The widespread adoption of modern drilling methods such as
horizontal drilling and hydraulic fracturing, or fracking, by
Chesapeake and other producers led to a boom in natural gas
production that has far outstripped demand and caused prices to
Natural gas closed at a $2.63 a million British thermal
units on Tuesday, compared to nearly $14 a million British
thermal units in July 2008.
McClendon said the company's oil services segment "will be an
excellent candidate" for an initial public offering later this
year. The segment reported revenue of $145 million in the
fourth quarter, up from $67 million the year before.
Dow Jones Newswires