Chesapeake to sell some Oklahoma assets to Newfield for $470 million
- Wall St posts third straight quarterly loss as inflation weighs, recession looms
- Intel's Autonomous Unit Mobileye Files U.S. IPO, Defying Weak Market Conditions
- Nike (NKE) Drops 9% as Inventory Surges 44%, Analysts See Attractive Valuation
- Hollywood Super Agent Attempts to Open Door for Twitter-Musk Settlement - Bloomberg
- Dollar up on euro as quarter ends, commodity led currencies sink
A Chesapeake Energy natural gas well pad rests on the hill in Litchfield Township, Pennsylvania, January 9, 2013. REUTERS/Brett Carlsen
Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.
(Reuters) - Debt-laden Chesapeake Energy Corp (NYSE: CHK), the second-largest U.S. natural gas producer, said on Thursday it was selling $470 million in assets in Oklahoma to Newfield Exploration Co (NYSE: NFX) as part of a plan to shore up its finances through divestitures.
Chesapeake's shares were up 12 percent at $6.31 in premarket trading after the company reported a smaller quarterly loss and cut its production expense forecast for the year. They later traded at $5.97, up 5.7 percent.
The company, which has more than $9 billion in debt, said it would sell about 42,000 net acres in Oklahoma's STACK field, with current production of 3,800 barrels of oil equivalent per day.
Low natural gas and oil prices have hit the heavily leveraged company, which plans to sell assets worth an additional $500 million to $1 billion this year.
"We anticipate subsequent divestitures during the second and third quarters," Chief Executive Doug Lawler said in a statement.
The company on Thursday lowered its forecast for 2016 production costs to $3.40-$3.60 per barrel of oil equivalent from $3.60-$3.80 per boe.
Chesapeake said in February that it tapped legal counsel Kirkland & Ellis for advice as it seeks to strengthen its balance sheet to manage debt maturing in the next 18 to 24 months. It said it had no plans for bankruptcy as some in the market have speculated.
"We continue to look at all of our options, including the use of additional secured debt, private transactions with bondholders and other types of exchange offers and open market purchases," said CFO Nick Dell'Osso.
The company's net loss attributable to shareholders narrowed to $964 million in the three months ended March 31, from $3.78 billion a year earlier. The year-earlier period included one-time items of $3.8 billion. First-quarter revenue fell 39 percent on the year to $1.9 billion as gas prices tumbled.
Excluding an $853 million impairment charge, the loss in the latest quarter was 10 cents per share, in line with analysts' average estimate.
Revenue slumped 39 percent to $1.95 billion, widely missing analysts' expectations of $2.55 billion.
(Reporting by Swetha Gopinath and Amrutha Gayathri in Bengaluru; Editing by Terry Wade and Dan Grebler)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Carnival Corp. (CCL) Tumbles After Q3 Earnings Miss
- U.S. senator backs extending Boeing 737 MAX approval deadline
- Burkina Faso army captain announces overthrow of military government
Create E-mail Alert Related CategoriesEarnings, Reuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!