Concerns about an almost 50% drop in gas prices and a possible surplus, Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has reduced its drilling budget during the second half of 2008 through year-end 2010 by about $3.2 billion, or 17%.
            

The second concern is over the possibility of an emerging gas surplus in advance of an increased demand from the U.S. transportation sector.
            

The company reports that of the $3.2-billion reduction, $800 million is attributable to its recently closed Fayetteville shale joint venture with BP America, $500 million to a Marcellus shale joint venture and $1.9 billion to reduced drilling activity.
            

The company plans to reduce the number of rigs it has at work 157 rigs to approximately 140 rigs by year-end and expects to keep that count relatively flat through 2009 and 2010.
            

The company has also reduced its 2008 production-growth estimate to 18% from 21%, and from 19% to 16% for 2009 and 2010. JAS