?Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has increased its curtailment of gross gas production to approximately 400 million cu. ft. per day due to continued low wellhead prices. This doubles the previous 200-million-cu.-ft.-per-day curtailment previously announced on March 2. Chesapeake has resumed 7,000 bbl. per day of oil production from previously curtailed oil wells.
The curtailment represents approximately 13% of Chesapeake’s current gross operated natural gas production capacity. The curtailed wells are primarily in the Midcontinent and Barnett shale regions. Until gas prices strengthen, Chesapeake plans to limit production from most newly completed wells in the Barnett and Fayetteville to 2 million cu. ?area in Mountrail and Burke counties with about 1,200 of those developed. Approximately 8,000 gross acres are held by production, with the remainder expiring between 2009 and 2013. The average net revenue interest is 84%.
The assets include three operated wells and five nonoperated. Projected production for May is 618 bbl. of oil per day gross (61 bbl. net) and 565,000 cu. ft. of gas per day gross (49,000 net). Projected cash flow in May is $57,100. Upside includes 80 gross undeveloped 1,280-acre spacing units. Additional potential exists in the Tyler sand and Lower Bakken/Three Forks lime bank.
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