By Steve Gelsi, MarketWatchNEW YORK (MarketWatch) — Chesapeake Energy Corp.’s scaling back 7% of its total production and may make further reductions in drilling activity as management comes to grips with low natural-gas prices, the energy giant said Monday.

Chesapeake said the gas market may return to balance by end of 2009, if not sooner, as the Oklahoma City-based company sounded a note of hope after a series of cutbacks.

Wall Street didn’t immediately share the company’s optimism, as Chesapeake shares fell 9% to $14.28 during a brutal sell-off in the energy sector.

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