July 21 (Reuters) - Chesapeake Energy Corp, the second-largest U.S. natural gas producer, said it would suspend dividend payments starting in the current quarter to save up to $240 million a year.
The company, which like other oil and gas producers has been hurt by a drop in prices, had planned to pay an annual dividend of 35 cents per share.
In suspending its dividend for the first time since 1998, Chesapeake joins other companies in the energy industry that have cut or suspended dividend payments to save capital.
Chevron Corp said in May it would not raise its dividend in the second quarter and that it would see "where things shake out long term" before raising its payout.
Oklahoma City-based Chesapeake reported a first-quarter loss in May and said it would raise production this year.
The company said on Tuesday that money saved by not paying a dividend would be used to develop its "high-quality" assets.
Chesapeake Energy shares were little changed at $10.30 in premarket trading. The stock has lost more than 60 percent of its value in the past year.
(Reporting by Shubhankar Chakravorty and Anannya Pramanick in Bengaluru; Editing by Saumyadeb Chakrabarty and Ted Kerr)
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