Chesapeake Energy eliminates dividend as gas, NGL prices slump
By JOE CARROLL
Bloomberg
Chesapeake Energy halted its quarterly dividend for the first time in more than 14 years as slumping energy prices crimped cash flow for the second-largest US natural gas producer.
“Due to the current commodity price environment for oil, natural gas and natural gas liquids (NGLs), and the resulting reduction in capital available to invest in its high-quality assets, Chesapeake Energy will eliminate its common dividend effective 2015 third quarter,” the company said in a statement.
Oklahoma City-based Chesapeake said it will redirect the cash into its 2016 capital expenditure program.
The US benchmark price for gas, which comprises 83% percent of Chesapeake’s output, tumbled 40% from a year earlier to a second-quarter average of $2.737/MMBtu.
Chesapeake is expected to post a loss of $3.18 billion this year, based on the average of eight analysts’ estimates compiled by Bloomberg. That would be the company’s biggest annual loss since 2009.
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