Sign of the times....
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The Oklahoma City energy company plans to divert capital from natural gas development to develop a dozen oil and liquids-rich fields.
Chesapeake and other large natural gas producers such as Newfield Exploration Co. (NFX) and EOG Resources Inc. (EOG) are pursuing more oil to boost profit and take advantage of higher prices for oil and natural gas liquids. For example, Chesapeake has amassed 400,000 acres in the Eagle Ford Shale over the last nine months at an oil- and gas-bearing rock formation in South Texas.
"That's where the money is," McClendon said in a conference call to discuss the company's first-quarter earnings.
Natural gas prices have lost about a third of their value since hitting highs in January of about $6 a million British thermal units as heating demand fades and producers increase drilling activity in prolific onshore natural gas fields known as shales. Oil prices have more than doubled since early 2009 and recently traded near $80 a barrel.
"The stage is set for a rejuvenation of the onshore oil business," McClendon said.
By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com
http://online.wsj.com/article/BT-CO-20100505-712180.html?mod=WSJ_la...
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