U.S. shale gas producer Chesapeake Energy Corp. last week cut about 3% of its workforce, according people familiar with the matter, as it readies a sale of South Texas oil properties.

The company this year said it would exit oil-producing properties in the Eagle Ford shale region of Texas to focus on its mainstay natural gas operations. The Oklahoma City-based company this year has faced pressure from an activist investor to boost its value.

A Chesapeake Energy spokesperson declined to comment.

About 40 workers, including geologists and geoscientists, involved in its oil production were dismissed last week, the people said. Chesapeake has about 1,200 employees in total.

The assets on offer include those acquired in the nearly $4 billion purchase of Wildhorse Resource Development in 2019, as the company sought to add then-more lucrative crude oil to its production.

Oil prices fell the following year, a drop that helped send Chesapeake into restructuring. It emerged from Chapter 11 bankruptcy last year as natural gas prices began to rise.

Analysts expect the company to report third-quarter adjusted earnings of $4.44 per share, up from $2.38 a year ago, according to Refinitiv IBES, as Chesapeake has benefited from this year's increase in natural gas prices driven by Russia's invasion of Ukraine. It is expected to report quarterly results on Nov. 1.

Shares fell 31 cents on Oct. 24 to $96.71, but are up about 40% year to date.

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