Chesapeake Energy Corp. shares jumped the most in almost two years, putting it on top of the S&P 500, after the shale explorer pledged to continue its push to cut spending and sell more assets in the year ahead.
Chesapeake raised $1.3 billion last year from asset sales and has fired thousands of employees to cope with a burdened balance sheet. Still, the company’s debt load remained little changed in 2017 at about $10 billion, according to its fourth-quarter earnings statement.
Moving forward, the goal is to slash debt by as much as $3 billion, Chief Executive Officer Doug Lawler said on a conference call with analysts.
“The measurement of this great company will be what we deliver in the next five years,” Lawler said. “We are committed to making material progress toward our goal of $2 billion to $3 billion in debt reduction in 2018.” Chesapeake shares jumped 22 percent to close at $3.20 in New York, the biggest gain since April 2016.
The Oklahoma City-based driller’s production is about 80 percent gas, but that could change as it focuses on selling gas assets to chip away at its debt load, said Nick Dell’Osso, the company’s chief financial officer, on the call. Nationwide, the company said it plans to trim its capital budget by 12 percent this year to $2.18 billion.
In Wyoming’s Powder River field, output from three recent Chesapeake wells averaged 90 percent crude.