UPDATE: Citigroup Revises Chesapeake Energy to Neutral/High Risk; Transition to Asset Development

Citigroup reduces its rating on Chesapeake Energy (MYSE: CHK) from Neutral to Neutral/High Risk while reiterating its $20 price target on shares.

Citigroup comments, "This morning, Chesapeake announced initial results from two hz wells in the Hogshooter play in the Anadarko Basin, OK, where it holds a net 30K acres. …We view the news as a positive catalyst for CHK, exemplifying its commitment to transition from a land acquisition company to an oil and liquids producer. While it reduces its dry gas rig count to 12 by YE'12 (from 50 in Q1), the liquids-rich Eagle Ford (30 rigs), Utica (13 rigs), Mississippian Lime (22 rigs) and Anadarko Basin (44 rigs) regions should dominate CHK's focus/capital going forward."

CHK closed at $16.40 on Friday.

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