* Key earnings metric also below expectation
* Capex shrinks but higher than estimate
* Shares fall as much as 10 pct (Adds analyst, CEO comment; updates share price)
Aug 1 (Reuters) - Natural gas and oil producer Chesapeake Energy Corp's average daily production volumes in the second quarter missed analysts' estimate and expenses jumped, sending its shares down as much as 10 percent on Wednesday.
Oklahoma-based Chesapeake's average daily production in the June quarter rose 0.5 percent to 530,000 barrels of oil equivalent per day, but fell short of market expectations of 534,000 barrels, according to analysts at Tudor, Pickering and Holt.
The company's capital expenses declined 11 percent to $595 million in the quarter, but overshot market expectations of $563 million, at a time when investors are pushing oil producers to boost production at lower costs.
"Given the combination of less EBITDA and higher capital expenditure versus Street expectations, we wouldn't be surprised if the stock faced some near-term pressure," analysts at Simmons & Co said.
Chesapeake's adjusted earnings before interest, tax, depreciation and amortization (EBITDA) also came below analysts' expectations, at $536 million compared with estimates of $566 million.
The company has been shifting to oil from natural gas and focusing on regions such as the Powder River Basin in Wyoming to take advantage of rising crude prices as natural gas prices remained under pressure from record high production.
Gas prices declined about 4 percent in the reported quarter from a year earlier, while oil rose 61 percent in the same period.
"The Powder River Basin is expected to be the main driver of oil and cash flow growth for Chesapeake in the coming years," analysts at Simmons and Co said.
Chesapeake said last week it would sell its Ohio natural gas acreage to Encino Acquisition Partners for about $2 billion to trim its $9.83 billion debt pile.
"This transaction marks the conclusion of Chesapeake's strategy of asset sales being the primary driver of debt reduction," Chief Executive Officer Doug Lawler said in a conference call with analysts.
Lawler said Chesapeake will now shift to more production. The company has been bringing more wells online, as well as testing longer lateral wells in some oilfields.
Net loss available to shareholders was $40 million, or 4 cents per share, in the second quarter ended June, compared with a profit of $470 million, or 47 cents per share, a year earlier.
Excluding items, the company earned 15 cents per share, inline with analysts' average estimate, according to Thomson Reuters I/B/E/S.
The company's shares pared losses to be last down 7 percent at $4.37 in late morning trading on Wednesday. (Reporting by Anirban Paul in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila)