Cheaspeake Energy Contnues Asset Sales to Pay Down Debt

Chesapeake Energy Corp. (CHK) agreed to sell gas fieilds in the Permian basin and other assets for $6.9 billion. The Oklahoma City company needs to sell some of its oil and gas interests to fill a funding gap that analysts estimate at $4 billion in 2013. Chesapeake said in a statement Tuesday. Buyers of the properties included Royal Dutch Shell Plc (RDSA) and Chevron Corp. (CVX) The announcement follows one last week that Chesapeake will sell up to $14 billion in assets by the end of the year, with proceeds targeted to debt reduction, according to company CEO Aubrey McClendon By the end of the third quarter, Chesapeake will have announced nearly $12 billion in asset sales so far this year. That figure includes the sale of most of the company's 1.5 million acres in the Permian Basin and its midstream business. The debt reduction program is part of an overall strategy to boost the company's stock price. Last June, it replaced its chairman and four members of its board due to pressure from large shareholders. In the last year, Chesapeake saw it shares drop from $31 per share last September to just $14 per share in May. Part of its problem is a glut of Natural Gas Chesapeake is the world's second largest natural gas producer. But gas prices have dropped substaintially due to oversupply. The warmest winter on record reduced demand for natural gas, but producers kept o kept on producing more than ever. It's led to a glut and fears that the nation's storage facilities would run out of room. Natural gas prices hit a ten-year low early in April. Since the board shake-up and the continuation of asset sales program, Chesapeake has rallied to over $20 per share.