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UPDATE 1-Chesapeake sees 15 pct drop in Q3 output due to Harvey

(Adds details on forecast)

Sept 26 (Reuters) - Chesapeake Energy Corp said on Tuesday it expects a 15 percent drop in third-quarter production, in part due to Hurricane Harvey, which knocked out nearly a fifth of the United States' oil-refining capacity.

The oil and natural gas producer said it expects current-quarter production to be about 542,000 barrels of oil equivalent per day (boepd), lower than the 638,100 boepd it reported a year earlier.

Chesapeake also said asset sales and changes to its capital allocation contributed to the drop in production, but added it expects those impacts to be limited to the third quarter.

The Oklahoma-based company had warned in August that production would be affected as it had to shut down some operations due Harvey.

The company said it now expects its adjusted production for the full-year to range between a drop of 1 percent and an increase of 1 percent, compared with its previous view of flat to 4 percent growth. (http://bit.ly/2y5Ajrh)

Chesapeake, however, maintained its full-year total capital budget of $2.10 billion to $2.50 billion and said it expects to bring 120-130 new wells into production in the fourth quarter. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)