Chesapeake Energy Corp. executive Jeff Mobley briefly touched on the company’s ongoing transformation Tuesday when he spoke to analysts at the Deutsche Bank Leveraged Finance Conference in Scottsdale, Ariz.
“We are focusing on … a drastically different strategy focused on returns, but understand that the key elements for success are in place,” said Mobley, Chesapeake’s senior vice president of investor relations and research.
He said new CEO Doug Lawler, who took the helm at Chesapeake in June, is conducting a “comprehensive review” of the Oklahoma City-based oil and natural gas producer.
“We expect to have that review largely, if not entirely, complete by November 1 and we really looked at every aspect of the company,” Mobley said Tuesday. “We looked at our organizational structure, we’ve looked at our overhead, we’ve looked at our LOE (lease operating expenses) cost and our field operations approach, we’ve looked at our portfolio and our financial planning process and reviewing our non-core affiliates and what we’re trying to do is reposition the company in a way that is much more efficient.”
The company has laid off at least 90 people recently.
Chesapeake reported Sept. 24 that it had laid off 86 employees, while The Oklahoman has confirmed the company has parted ways with its three chaplains, beekeeper and seven-member natural gas vehicle team.
In Tuesday’s talk, Mobley said Chesapeake has 6,000 employees, but later clarified that is in Chesapeake Operating Inc., the company's exploration and production business, according to the company.
The company has more than 12,000 employees, according to its most recent annual report, filed in March.
Mobley said Chesapeake’s strength is what it believes is one of the largest unconventional resource bases in the United States.
“We’ve reached that inflection point with the vast majority of our core leasehold and the very best plays, largely held by production or a near term plan to be held by production very soon, and so we can rapidly shift towards improving efficiencies.”
“Focusing on profitable and efficient growth, we’ve got great cards to work with. We got world-class inventory in some of the best plays, such as the Marcellus Shale, the Eagle Ford Shale, the emerging Utica Shale play, as well as underpinned by world-class gas assets, particularly in the Haynesville Shale. They are fantastic reservoirs.”
Chesapeake’s efforts to limit costs have resulted in cuts to its drilling program.
Mobley said Chesapeake is operating 61 drilling rigs, down from a peak of 175. He said he expects Chesapeake to run 60 to 80 rigs for the foreseeable future.