Landon Capital

Chesapeake Energy (NYSE:CHK), one of the U.S.’s top natural gas producers, started handing out pink slips this week after unloading its oil assets last year, the company announced Monday.

These layoffs are tied to its exit from the Eagle Ford (NYSE:F) assets, not the impending merger with Southwestern Energy (NYSE:SWN), Chesapeake clarified, perhaps hoping to quell any rumors of merger-related jitters.

While mum on the specifics of the layoffs, Chesapeake has been clear about its strategic pivot. In 2022, the company bid adieu to the Eagle Ford shale field in South Texas, cementing its status as a pure-play natural gas producer.

Earlier this year, it sold some of those assets to INEOS Energy for a cool $1.4 billion, and wrapped up the divestiture by offloading the rest to SilverBow Resources (NYSE:SBOW) for $700 million.

Based in Oklahoma City, Chesapeake is also tying up a $7.4 billion merger with Southwestern Energy, scheduled to finalize in the latter half of this year, a bit delayed after the U.S. Federal Trade Commission asked for more info.

Natural gas producers like Chesapeake have been feeling the heat this year with prices tanking by about 20% in Q1 due to bloated inventories and weaker-than-expected demand. Missing Wall Street profit estimates, Chesapeake and others have been dialing back production in response.

In a shakeup accompanying the merger, Chesapeake will swap out its General Counsel Benjamin Russ for Southwestern’s Chris Lacy, as per a regulatory filing on May 7.