Last Wednesday, Chesapeake Energy Corp. (NYSE: CHK) stated that it is on track to meet part of its debt repayment terms through asset sales. It has been trying to sell almost $14 billion worth of assets in order to reduce debt and aid its foray into oil drilling.
Chesapeake is the second-largest producer of natural gas, following Exxon Mobil Corp. (NYSE: XOM). Chief Executive Aubrey McClendon said that the company’s second-quarter oil production rose to 21 percent from its earlier level of 10 percent. He expects the company to complete (or at least announce) asset sales worth $11.7 billion by the end of the third quarter of this year. The announcements were made at the Barclays CEO Energy/Power Conference held in New York.
In the coming year, Chesapeake hopes to dispose of $4.25 to $5 billion in assets. Though the company has lost some large portions of drilling land through sell-offs, Chesapeake anticipates 18 percent higher production compared to 2011.
McClendon also announced that Chesapeake is engaged in funding its Mississippi Lime operations through securing a joint venture partner and that more details will follow within the next few months.
As of the second quarter, the company’s debt stood at $14 billion, and the goal is to reduce that to $9.5 billion by 2013. Chesapeake used to be a leader in natural gas production when production was still scarce, but the ensuing shale revolution caused an overabundance of natural gas supply. This drove prices down—and with that, Chesapeake’s fortunes. Shares were down 2.02% on Monday to $19.93, still well above their year-long low of $13.32 in May.