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On Tuesday, Chesapeake Energy Corporation (CHK - Analyst Report), an independent oil and gas company, reported that it has reduced its workforce by roughly 10% this year.

In an attempt to increase profits, Doug Lawler who became the chief executive officer of Chesapeake last June, has taken a firm decision to significantly lower the cost. One of the ways is to slash the workforce and Lawler has accelerated the process since he took over. Chesapeake has also divested non-core assets worth $4 billion in this year in order to focus on core operations. Since Doug Lawler’s joining, the share price of Chesapeake has hiked 20%.

Oklahoma-based Chesapeake is engaged in the acquisition, development and production of onshore U.S. natural gas resources. The company has grown rapidly and is now the second largest natural gas producer in the U.S.

During the second quarter, Chesapeake registered higher production on lower operating costs from its underlying assets. The company also maintained its full-year 2013 production guidance in the band of 1,434–1,478 Bcfe. Natural gas is expected to contribute 1,080–1,100 Bcf to the total production. Oil production forecast is 38–40 million barrels/MMBbls, and NGL will likely be in the 21–23 MMBbls range.

The growth drivers were higher-than-expected oil output from Eagle Ford as well as gas yield from Marcellus and improved liquids volumes.

However, since natural gas accounted for about three-fourth of Chesapeake’s first half production, results are particularly vulnerable to fluctuations in the natural gas market.

Chesapeake currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better performing oil and gas exploration and production companies like Devon Energy Corporation (DVN - Analyst Report), Matador Resources Company (MTDR - Snapshot Report) and Stone Energy Corp. (SGY - Analyst Report) that offer value. All the stocks sport a Zacks Rank #1 (Strong Buy).

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