OREANDA-NEWS. August 04, 2017. Chesapeake Energy, the second largest producer of US gas by volume, will pare drilling in the second half of this year to shore up its balance sheet.

The independent will reduce its rig count to 14 by year's end, down from 18 today. But its production and spending guidance is unchanged. Chesapeake's second quarter output was 527,600 b/d of oil equivalent (boe), down by about a fifth from a year earlier after adjusting for asset sales.

Oil output was flat from a year-earlier at about 88,400 b/d, while Chesapeake's gas output, which represents about 73pc of the total, was 2.3 Bcf/d (65mn m?/d) down by about 22pc.

"Further reducing our debt is our top priority," Doug Lawler, Chesapeake's chief executive, said today during a conference call to discuss the quarterly results. The company is targeting debt reduction of $2bn-$3bn and has announced about $360mn in new divestitures in the year-to-date.

Chesapeake, an early innovator in oil and gas production from shale formations, amassed huge positions in the most prolific US fields over the last decade. But it continues to liquidate those assets to pay for that early buying binge after a flood of supply led to lower US energy prices. The company, like other US producers, has focused on keeping spending within cash flow, drilling in areas where it achieves the highest profits and improving the performance of each new well.

Chesapeake touted a recent $8.5mn well in the Marcellus shale, the top producing US gas field. That well in northeast Pennsylvania had output of more than 61mn cf/d, the highest ever achieved by the company. But Chesapeake's growth in the Marcellus will be capped until more pipeline capacity is added in the field.