Falling energy prices have caused a $4.02 billion write-down of some of Chesapeake Energy Corp’s properties.
This is following the decrease of oil price to less than US$50 a barrel.
Amid the swoon in oil prices, Chesapeake has reduced rig operations and cut capital expenditures after failing to offset the plunge with higher production.
Average operated rig count during the latest quarter fell 50% from the previous quarter to 26, a far cry from the 65 rigs in operation during the same three-month period in 2014. Drilling and completion costs were slashed 40% from both the previous quarter and the same quarter in 2014 to $787 million.
Chesapeake’s daily production averaged around 703,000 barrels of oil equivalent, an increase of 13% over the same period in 2014. The company also reported its average realized oil price for the quarter was down to $67.91 from $85.23 in 2014.