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(Reuters) - Chesapeake Energy Corp (CHK.N) on Wednesday said it would slash its 2015 spending and rig count in response to low crude oil prices that also pushed its fourth-quarter profit below Wall Street expectations.
Shares of Chesapeake fell more than 11 percent, hurt by the earnings miss and a disappointing production outlook, analysts said.
Crude prices have slumped more than 50 percent since June as the global oil market remains oversupplied in a time of waning demand. Exploration and production companies have responded by cutting their budgets to conserve cash.
Chesapeake forecast total capital expenditures of $4 billion to $4.5 billion this year, down from $6.7 billion in 2014.
The smaller budget translates into slower output growth. Oil and gas production for the year is forecast to rise 3 percent to 5 percent. In 2014, it increased 9 percent to an average of 706,000 barrels oil equivalent per day.
Analysts at CapitalOne Southcoast characterized the quarter as soft and told clients that Chesapeake's "weaker-than-expected liquids pricing plus 2015 guidance for production" would probably drive Wall Street estimates lower.
The average price Chesapeake received in the quarter fell far short of Wall Street forecasts.
Sterne Agee said Chesapeake's average oil price of $76.40 per barrel was 6 percent below the brokerage's estimate, and the company's natural gas liquids price of $13.11 missed its forecast by 28 percent.
On a conference call, Chesapeake said it started shutting in about 250 million cubic feet a day in natural gas production in December in the Marcellus Shale, citing low prices.
"We're forecasting weak Marcellus pricing for the full year," Chief Financial Officer Nick Dell'Osso told investors.
The Oklahoma City company also said it planned to operate 35 to 45 rigs this year, its lowest number since 2004 and down from an average of 64 rigs in 2014.
Chesapeake reported a profit of $586 million, or 81 cents per share, compared with a year-earlier loss of $159 million, or 24 cents per share.
Excluding gains from hedging, the profit was 11 cents per share. Analysts on average had expected 24 cents, according to Thomson Reuters I/B/E/S.
Shares of Chesapeake were down 11.3 percent at $17.65 in morning trading.
Reporting by Anna Driver; Editing by Lisa Von Ahn