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Aug. 2 (UPI) — Chesapeake Energy anticipates a substantial increase in drilling activities in some of the most profitable natural gas basins in the United States, nearly doubling the levels observed in the second quarter.
As one of the largest natural gas producers in the country, Chesapeake Energy reported a production of close to 3.6 billion cubic feet of reserves in the three-month period ending in June, with 96% of it in the form of natural gas.s
This production volume is comparable to the expected output solely from the Bakken formation, despite it being the least productive gas basin among the seven primary shale basins inland in the United States.
Chesapeake Energy, however, has its focus on the Appalachian and Haynesville basins, particularly benefiting from the former where its net average for the second quarter is nearly ten times higher. The Haynesville shale play, located along the Louisiana-Texas border, ranks as the country’s third-largest inland natural gas producer.
These developments align with the company’s ambition to enter the liquefied natural gas market, as evident in its supply agreement with the Lake Charles export facility in Louisiana.
In terms of production activity, Chesapeake Energy drilled 53 new wells and put 27 into production during the second quarter.
“The company expects to drill 30 to 40 wells and put 40 to 50 wells into production in the third quarter of 2023,” the company stated. “The company’s operating plan is flexible and ready for further adjustments based on market conditions.”
However, energy companies have been greatly impacted by current market conditions. Major oil corporations like ExxonMobil and Shell reported decreased profits due to a low-price environment during the first half of the year.
Chesapeake Energy reported a profit of $391 million for the second quarter, which represents a significant decline compared to the $1.24 billion reported during the same period last year.
In line with the decrease in oil prices, which are approximately $40 per barrel lower than the peaks observed in 2022, U.S. natural gas prices averaged $2.42 per million British thermal units in the second quarter, marking a 60% decline compared to the same period last year.
The price decline last year was a result of the disruption in Russian oil and natural gas supplies caused by sanctions in response to the Ukrainian invasion. Since then, the markets have adjusted with support from U.S. oil and liquefied natural gas exports.
