Chesapeake to cut back on gas drilling

Hands off: Chesapeake believes dry gas is no longer economically attractive to develop, says chief Aubrey McClendon

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By Bill Lehane and news reports

 23 January 2012 14:26 GMT

Chesapeake Energy will cut its drilling for dry gas in half with prices for the fuel at their lowest level in a decade, the company said on Monday, sending its shares up more than 5%.

The move by the second-largest US natural gas producer is the industry's biggest reaction yet to low prices resulting from a supply glut that has emerged with the boom in shale rock drilling around the country, Reuters reported.

Chesapeake has been the most aggressive driller in the United States, expanding its acreage holdings and pushing into new fields despite the boom in production.

"An exceptionally mild winter to date has pressured US natural gas prices to levels below our prior expectations and below levels that are economically attractive for developing dry gas plays…

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