Chesapeake offers voluntary separation program
Chesapeake Energy Corp. on Friday offered a voluntary separation program for 275 employees.
Chesapeake Energy Corp. on Friday offered buyouts to 275 employees based on a combination of age and years of Chesapeake service.
Eligible employees will have 45 days to consider the offer, the company said.
“This program is designed to give our longer-term employees the chance to benefit from their years of service to Chesapeake while furthering our efforts to maximize corporate performance and maintain our leadership role in this competitive and constantly evolving industry,” said Martha A. Burger, Chesapeake's senior vice president of human and corporate relations.
Chesapeake has been under intense scrutiny from investors and analysts throughout much of the year because of high debt levels and reduced cash flow from lower natural gas prices.
Chesapeake employs about 13,200 people nationwide and more than 4,800 in Oklahoma City.
Industry analyst Fadel Gheit said the reduction makes sense now that the company has moved into what CEO Aubrey McClendon has called “harvest mode” instead of its previous expansion mode.
“I'd expect Chesapeake to become a smaller, leaner company because they are shedding a lot of assets,” said Gheit, an analyst with Oppenheimer in New York. “You have to have the head count be reflective of the activity level. If activity drops, the head count will have to drop, too.”
Chesapeake previously announced $11.1 billion in asset sales to close this year and another $425 million to close in the first quarter of 2013. The company has said it plans to sell $14 billion in 2012 and a total of $17 billion to $19 billion by the end of 2013.
“Definitely they don't need as many people as you thought they would need given that they are selling substantial activities,” Gheit said.
Friday's announcement comes after Chesapeake announced earlier this year that it planned to eliminate thousands of contract landmen. McClendon said in July that the company's use of contracted landmen would drop to 650 by the end of the year, down 80 percent from a peak of 3,400.
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