Cheaspeake Energy to cut spending, sell assets

By OGJ editors
-- Chesapeake Energy Corp. announced plans to reduce its long-term debt by 25% by substantially reducing leasehold spending and by reducing its 2-year production growth rate to 25% from its previously planned growth rate of 30-40% for 2011-12.

Aubrey K. McClendon, Chesapeake’s chief executive officer, said the latest plan is a shift from Cheaspeake’s “aggressive asset accumulation of the past few years.” The growth plan reduction will be achieved “through asset monetizations,” a news release said.

Chesapeake said its 2011-12 strategic plan update will not involve issuing any common or preferred stock to achieve its debt reduction objective. Chesapeake reported net debt of $11.4 billion as of Sept. 30, 2010.

The company did not specify which assets it might sell. Chesapeake of Oklahoma City said its full-year 2010 production of 2.8 bcfd of gas equivalent marked a 14% increase over its 2009 production.

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