Chesapeake Energy dropped 800 workers from its payroll Tuesday as new management continues to throttle down from an aggressive stance that threw the company into deep debt.
The Oklahoma City-based oil and gas producer’s total job cut count this year is 1,200 employees, about 10 percent of its workforce.
The move comes months after the company’s embattled co-founder and former chief executive Aubrey McClendon departed amid federal scrutiny of perks and dealings and shareholder pressure over a sharp drop in cash flow and escalating debt, which peaked at $16 billion last year.
Investors erased $8 billion from Chesapeake’s market value at one point last year.
“By scaling E&P support services, reducing management layers, and aligning resources with a sharpened focus on accountability and efficiency, we have created a business built to deliver a sustainable and profitable future,” Doug Lawler, the company’s chief executive since June, said in a letter to employees Tuesday. The company has ended its organizational restructuring for now, he wrote.
Alternative fuel: Chesapeake’s role in natural gas vehicles to fade
Last month, Lawler told investors at a Barclays conference that Chesapeake would focus on balancing the company’s expenditures with operational cash flow and allocate capital to only the most lucrative projects.
The company also slashed spending in half this year to $7.2 billion, a big change from a decade outspending the cash flow and building a reputation as one of the most aggressive land grabbers among U.S. producers.
In July, the country’s second-largest natural gas producer sold off $1 billion in Eagle Ford and Haynesville shale assets.
Chesapeake has also chipped away at its rig count, sitting now at half its fleet from two years ago. That drop accounts for half of the fall in active rigs in the U.S., according to Raymond James.
Wall Street appears to like the shift in strategy. The company’s stock price dipped less than 1 percent Tuesday but over the past year has come up 34 percent to $26.05.
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