Chesapeake on Sunday became the largest U.S. oil and gas producer to seek bankruptcy protection in recent years as it bowed to heavy debt and the impact of the coronavirus outbreak on energy markets.
The company said it aims to run a rig program of six to eight rigs for the next two years, half the number of rigs it had been running in the first quarter. The producer plans to run seven to eight rigs between 2022 and 2024, a regulatory filing showed.
Chesapeake was operating 15 rigs on average in the fourth quarter last year before the coronavirus pandemic sapped fuel demand and roiled the energy markets. Last quarter, its rig count edged down to 14 rigs.
The filing also showed Chesapeake’s plans to operate an average of just six rigs spread out in Appalachia and Gulf Coast in the third and fourth quarters of this year, compared with 14 in the first quarter. Its second-quarter average is estimated at seven rigs, with 36 gross wells drilled.
The producer, which spent heavily to become the top U.S. producer of natural gas at one point, will now have to shrink back as it works through bankruptcy and battles a historic downturn in oil prices.
Reporting by Taru Jain; Editing by Maju Samuel