HOUSTON Feb 6 Chesapeake Energy Corp, the No. 2 natural gas producer in the United States, said on Thursday that unusually cold weather across much of the country was hurting its output.
The comments from Chesapeake Chief Executive Doug Lawler came as spot prices for natural gas, widely used to fuel power plants, spiked to the highest levels since 2008.
Freezing temperatures across the country this winter have pushed demand to all-time highs and filled the pipeline system to capacity, while at the same time prompting a number of companies to say foul weather was snarling production.
Estimated U.S. natural gas output is running about 0.8 billion cubic feet per day (bfcd) lower than the 30-day moving average and is off 1.5 bcfd from the start of this year when temperatures were more moderate, according to Thomson Reuters Analytics - which sees current U.S. pure dry gas production of 65.2 bcfd.
Chesapeake's average daily oil and gas output in December was well below its expectations due to "weather challenges" that continued into January and February, Lawler told analysts on a conference call on Thursday.
Fourth-quarter and first-quarter production will be affected by the icy conditions that hampered some of the company's operations, but output should "ramp up" on a sequential basis in the second quarter, Lawler said.
On Tuesday, Chuck Meloy, an executive at Anadarko Petroleum Corp, said on a conference call the company's operations in Colorado were finally returning to normal.
"The Wattenberg field has suffered through the floods and the polar vortex and I'm sure the locusts are coming," he joked. "But ... our production is coming back."
Gas for Friday delivery at Henry Hub, the benchmark supply point in Louisiana, traded as high as $9 per million British thermal units early Thursday, its highest since August 2008, traders said.
Futures prices were up more than 1 percent on Thursday after rising more than 7 percent earlier in the day.
They pared gains when U.S. Energy Information Agency data showed an estimated natural gas draw through Jan. 31 of 262 billion cubic feet, lower than the 270 bcf forecasted by analysts.