Chesapeake Energy said Tuesday that it will cut 70 employees in North Texas, or about 8 percent of its area workers, reflecting reduced drilling activity caused by low natural gas prices.
Chesapeake, the second-largest producer in the Barnett Shale, said it will employ about 700 in the field after the cuts are made. The Oklahoma City-based company has said previously that its employment reached about 1,200 during the peak of drilling.The company also said it plans to relocate about 60 employees in a pipeline subsidiary from Chesapeake Plaza, the gleaming office building where its Fort Worth regional office is located, to a site in downtown Fort Worth. It said that while Chesapeake would entertain offers for the office building just west of downtown , which it bought in 2008 from Pier 1 Imports, it is not listed for sale, and the company expects to continue to occupy it.Besides Fort Worth, Chesapeake has a large office in Cleburne. The positions being eliminated at those offices "are in support departments such as public affairs, marketing communications, community relations, legal, land administration, administrative services and information technology. These are the departments most directly impacted by reduced leasing and drilling activity."Since natural gas prices began a sharp decline from their peak in July 2008 and reached 10-year lows this year, Chesapeake and other producers have moved into fields that produce more crude oil, which commands a much higher price. Chesapeake is further burdened with high debt and turmoil surrounding the personal finances of its high-profile CEO, Aubrey McClendon, who has come under pressure from two major shareholders.Julie Wilson, Chesapeake's vice president of urban development in the Barnett Shale, said in an e-mail to the Star-Telegram that in addition to the layoffs, the company has been transferring positions from North Texas to Oklahoma City and other regions.On May 2, the company said it would operate just two drilling rigs in the Barnett Shale, down from a peak of 44 in 2008 and 12 at the start of the year.At the same time, it said it slashed the number of independent land agents it used for leasing from about 350 to 139."Chesapeake will continue to have a significant presence in the Barnett Shale," said Wilson. She said affected workers "will receive generous severance packages" and outplacement assistance.Wilson also said that about 160 workers in Chesapeake Midstream Partners will become employees of Global Infrastructure Partners when the previously announced sale of that operation is completed later this year. She said about 60 of those employees who were stationed at Chesapeake Plaza will move to leased space in the DR Horton Tower downtown."This news has no doubt led to speculation of our intention to sell Chesapeake Plaza," Wilson said. The sale has been rumored for some time in real estate circles, but just last week Wilson told the Star-Telegram that it wasn't listed for sale.On Tuesday, she said that while the company "will certainly remain open-minded to any offer that may come in, we are more interested in leasing some of the space that will be vacated."She said the company is "actively looking for tenants" for the building, but "we fully intend to continue occupying it, whether as owner or future tenant."Jim Fuquay, 817-390-7552Twitter: @jimfuquayHave more to add? News tip? Tell us
