Top natural gas producer Chesapeake Energy (NASDAQ:CHK) is slashing its headcount following the divestment of its oil assets, according to Reuters.
The Layoffs
According to the report, the layoffs come after CHK divested its Eagle Ford assets last year. However, the full extent of the headcount reduction remains undisclosed. The exit from Eagle Ford was aimed at making CHK a pure-play natural gas operation. Under the move, the company offloaded its assets to INEOS Energy and SilverBow Resources last year.
Earlier this year, CHK announced a $7.4 billion merger with Southwestern Energy (NYSE:SWN). CHK noted that the layoffs are not associated with the deal.
The layoffs at CHK also come amid lower gas production at multiple energy companies this year due to delays in well completion and reduced drilling activities. Meanwhile, CHK expects its Southwestern deal to close in the second half of this year. The transaction is anticipated to create an energy giant with an enterprise value of nearly $24 billion and a major presence in the Appalachia and Haynesville basins.
What Is the Price Target for CHK Stock?
Chesapeake’s share price has steadily gained by nearly 14% over the past six months. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average CHK price target of $104.80. This points to a further 14.4% potential upside in CHK shares over the coming periods.
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