Chesapeake Energy announced Tuesday it would lay off 70 employees from its Barnett shale operations in North Texas.
The Oklahoma City-based company attributed the decision to trim staff from its Forth Worth and Cleburne, Texas offices to historic low natural gas prices and its efforts to redeploy assets to more economically promising fields.
The workers being laid off account for 8 percent of Chesapeake's workforce, substantially less than some recent rumors have indicated, said Julie Wilson, vice president of urban development for Chesapeake, in statement Tuesday.
The positions being eliminated were in support departments such as public affairs, marketing communications, community relations, legal, land, land administration, administrative services and information technology, which are the departments most directly impacted by reducing leasing and drilling activity.
"We have already take steps to transfer other employees to more prolific shale plays or to our headquarters in Oklahoma City where we have centralized certain support functions," said Wilson.
Following the transfers and layoffs of employees, Chesapeake's North Texas will number around 700.
The company currently has two drilling rigs in the Barnett shale play, and will have only one or two for the foreseeable future due to record-low natural gas prices.
Despite the layoffs and transfers, Chesapeake will continue to have a significant presence in the Barnett shale, despite the lower rig count and pipeline activities nearing completion, said Wilson. The company has invested $13 billion in capital expenditures in the community since 2004, and has paid over $1.5 billion in royalties to area mineral owners and more than $4.3 billion in leasehold acquisition bonuses.
"With approximately 60 new wells anticipated to be in production before year-end, we will be responsible for even more royalties and tax revenue," said Wilson.
The company also continues to add staff at its headquarters and in many of its field offices.
Chesapeake has placed a number of its assets up for sale in recent months, including its midstream assets and assets in the Denver-Julesberg Basin and Utica shale play in Ohio, in order to shore up its cash flow.
The company has seen its credit rating downgraded due to concerns over the company's ability to fund its operations and criticism over CEO Aubrey McClendon's personal financing dealings and the issues that have raised questions over conflicts of interest, such as the Founder Well Participation Program.
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