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Chesapeake Energy Corp. Chief Executive Officer Nick Dell’Osso urged his peers in the US natural gas sector to scale back production growth in response to the “very clear signal” from low prices for the fuel.“Growth in gas supply is not needed in the short term,” Dell’Osso said during an interview on Wednesday. “We do think the industry should acknowledge that and may reduce growth in the near term.”
Dell’Osso’s remarks came just hours after news broke of Chesapeake’s agreement to sell some South Texas shale assets for $1.43 billion to WildFire Energy. Shedding the package of drilling rights, wells and equipment is intended to hone Chesapeake’s focus on harvesting gas from the Haynesville and Marcellus shale regions.
Benchmark US gas prices are down 23% in the past year as rapidly increasing production ran headlong into slower-growing domestic demand and the shutdown of a key fuel-export complex on the Texas coast after a June explosion.
Just last month, top US gas producer EQT Corp. said the price plunge would slow supply growth. Dell’Osso on Wednesday noted that more output will be needed during the second half of this decade as demand surges due to increased overseas demand for American gas.
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