Chesapeake Energy Gets $3 Billion Loan
Chesapeake has been aggressively selling oil and gas assets, but its stock tumbled Friday after the company suggested that some of its planned sales could be delayed. Investors, who worried about a cash crunch if any sales were delayed or halted, sent Chesapeake's stock down 13.8% to close at $14.81 on Friday.
But the Oklahoma City company's shares climbed 3.7% to $15.35 in after-hours trading on news of the unsecured loan.
"This short-term loan from Goldman and Jefferies provides us with significant additional financial flexibility as we execute our asset sales during the remainder of 2012," Chairman and CEO Aubrey McClendon said in a statement.
Chesapeake said late Friday that it plans to complete $9 billion to $11.5 billion in asset sales during the remainder of 2012 and will use part of the proceeds from those sales to pay back the loan. The company previously outlined plans to sell as much as $14 billion of assets this year.
Chesapeake anticipates closing on the sale of its Permian Basin property in Texas and its Mississippi Lime joint venture during the third quarter, saying it has received strong interest for both assets from potential buyers.
Chesapeake also said that it will use the loan's net proceeds to repay borrowings under an existing revolving credit facility. The new facility expires on Dec. 2, 2017.
Shares of the company had drifted lower earlier on Friday after a published report said the company didn't tell investors about $1.4 billion in liabilities.