Chesapeake Sells More Land To Bridge Funding Gap
Here’s another real-world consequence of the $13 billion debt natural gas driller Chesapeake Energy is facing: the company is selling a half-million acres of drilling property in Wyoming and Colorado. From the Tribune-Review:
Chesapeake Energy Corp has put a half-million acres in Wyoming and Colorado up for sale, as the second-largest U.S. natural gas producer scrambles to raise cash to close a $9 billion to $10 billion funding shortfall. Chesapeake, which earlier this month arranged a pricey $4 billion loan from its investment bankers to tide it over, has said it will sell as much as $11.5 billion in assets this year.The deal for the acreage in the DJ Basin also includes oil and gas production from 29 wells that the company operates and Chesapeake’s interest in 24 non-operated wells, the company said. Also, billionaire investor Carl Icahn, known for pushing for change at the companies in which he invests, has become one of Chesapeake Energy Corp.’s largest shareholders, said a person with knowledge of the matter. His stake in the company may amount to more than 4 percent.
The company lost $71 million in this year’s first quarter, and had to scale back its cash flow estimate for this year from around $5 billion to under $3 billion. Cash flow is, of course, the amount of money a company is taking in during a set period of time. This sale comes less than a month after the company borrowed $4 billion from investors.
Chesapeake operates 191 producing Marcellus Shale wells in Pennsylvania.