(Reuters) -Natural gas producer Chesapeake Energy Corp (NYSE:CHK) missed Wall Street estimates for first-quarter profit on Tuesday as persistently low natural gas prices weighed down on the company's top-line results.
Natural gas prices had dropped 20.4% in the first quarter compared with the year-ago quarter, as high inventory combined with lackluster demand resulted in producers such as Chesapeake curtailing gas production.
The company said it plans to drop an additional rig in the Marcellus around mid-year.
Chesapeake Energy said that it expects total natural gas production for the second quarter between 2,620 million cubic feet of gas equivalent per day (mmcfepd) and 2,720 mmcfepd, which is below the 3,653 mmcfepd reported in the year-ago quarter.
The Oklahoma-based company is also executing its previously disclosed plan to delay bringing completed wells online for production, citing continued weak market dynamics. It added that it plans to activate the productive capacity of these wells when supply and demand imbalances correct.
Chesapeake Energy had joined its peers APA Corp and EQT Corp (NYSE:EQT) to curtail spending and natural gas output this year and said in February that it sees the market being "oversupplied".
The company's adjusted profit was 56 cents per share for the three months ended March 31, compared with analysts' average estimate of 60 cents per share, according to LSEG data.
Chesapeake, which is on the cusp of becoming the biggest natural gas producer pending its acquisition of Southwestern Energy (NYSE:SWN), reported quarterly net production of 3.20 billions of cubic feet equivalent per day (bcfepd), utilizing an average of nine rigs.