Chesapeake expects to raise more than $4 billion this year from asset sales and by spinning off its oilfield services division.
May 16 (Reuters) - Chesapeake Energy Corp said it expects to sell more than $4 billion in assets this year and will spin off its oilfield services division as the second-largest U.S. natural gas producer focuses on drilling more profitable wells and improving returns.
Doug Lawler has been chief executive officer of Chesapeake for nearly a year. Under Lawler, the Oklahoma City company has worked to drastically cut costs and debt and increase output of higher-margin crude oil and natural gas liquids.
The strategy marks a dramatic shift from Chesapeake under former CEO Aubrey McClendon, who spent heavily to acquire millions of acreage in shale formations across North America.
"This company is no longer going on a million-acre, three million-acre spending spree," Lawler told a meeting of Wall Street analysts in remarks that were webcast.
Lawler's plans, which included cutting 10 percent of Chesapeake's workforce, have so far been welcomed by Wall Street. The company's stock is up 39 percent for the past 52 weeks, better than the 13.3 percent gain in the Standard & Poor's 500 index.
Still, shares of Chesapeake slid 4.6 percent to $27.65 in midday New York Stock Exchange trading. Investors were disappointed by a 16 percent rate of return from the company's properties in the Powder River Basin in Wyoming.
"I'm not proud of that," Chris Doyle, head of Chesapeake's northern division, told analysts, adding that returns would improve as more oil and gas processing comes online.
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