Feb 24 (Reuters) - U.S. natural gas producer Chesapeake Energy Corp said it would make a debt payment due in March and that it planned to sell more assets as it aims to slash its debt load amid collapsing energy prices.
Chesapeake said earlier this month that it has tapped legal counsel Kirkland & Ellis to advise the company as it seeks to strengthen its balance sheet following a debt exchange, and that it had no plans to pursue bankruptcy.
The company said on Wednesday that it has struck deals to raise $700 million from asset divestitures so far this year. That is much higher than the $200-$300 million it had planned to raise through asset sales this year.
Chesapeake said it plans to sell assets worth another $500 million to $1 billion this year, and outlined a capital expenditure budget of $1.3-$1.8 billion, down 57 percent from 2015 levels.
Shares of the company, which also posted a smaller-than-expected quarterly loss, were up 7.8 percent at $2.36 in premarket trading.
Chesapeake has a debt payment of about $500 million due in March, with at least another $1.3 billion coming due through 2018.
The company had $9.5 billion in outstanding debt, more than $300 million in cash and a $4 billion credit facility as of Feb. 23.
The asset sales are expected to reduce production by as much as 5 percent this year, the company said.
Chesapeake also said it was renegotiating gathering, transportation and processing contracts, and that it had amended certain transportation agreements in the Haynesville, Barnett and Eagle Ford shale fields located in and around Texas.
Oil and gas pipeline companies, including Williams Companies Inc and Kinder Morgan Inc, have contracts worth billions of dollars that might be at risk as Chesapeake aims to lower its debt.
Chesapeake reported an attributable net loss of $2.23 billion, or $3.36 per share, for the fourth quarter ended Dec. 31. It earned $586 million, or 81 cents per share, a year earlier.
Excluding impairment charges of $2.83 billion and other items, Chesapeake lost 16 cents per share in the latest quarter, while analysts were expecting a loss of 17 cents, according to Thomson Reuters I/B/E/S.
(Reporting by Amrutha Gayathri in Bengaluru; Editing by Kirti Pandey)
Copyright 2016 Thomson Reuters. Click for Restrictions.
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