(Reuters) – Natural gas producer Chesapeake Energy (NYSE:) on Monday reported a loss for the second quarter, down from a profit a year earlier, as production fell and prices remained under pressure.
The overall average realized price, including hedges, fell 6% on faint demand due to a warmer-than-expected winter and increased inventories.
In response to falling prices, Chesapeake, as well as competitors such as EQT (ST:) and Coterra Energy (NYSE:) , cut their production earlier this year.
Chesapeake, which is on track to become the largest producer with the pending acquisition of Southwestern Energy (NYSE):, said production in the April-June quarter fell 24.9% to 2.75 billion cubic feet per day (bcf/d).
The U.S. Energy Information Administration predicts that domestic natural gas production will decline through the end of 2024. If the agency’s forecasts prove correct, 2024 will be the first year of failing production since 2020, when the COVID-19 pandemic reduced demand for the fuel.
Chesapeake lowered its 2024 capital spending forecast by about 4% to a range of $1.2 billion to $1.3 billion, while also reducing production spending by about 8%.
The company, which became a pure-play natural gas producer in 2022, said it expects third-quarter production to be between 2.57 billion cubic feet per day and 2.67 billion cubic feet per day.
Chesapeake’s net loss was $227 million for the three months ended June 30, compared with a profit of $391 million in the same quarter a year earlier.
On an adjusted basis, the company reported net income of 1 cent per share, while analysts had expected it to break even at a mid-range level, according to LSEG data.
