Chesapeake to meet with major lenders this week: sources

NEW YORK Tue May 29, 2012 7:41pm EDT

NEW YORK (Reuters) - Chesapeake Energy (CHK.N) will meet with many of its major lenders in Oklahoma City later this week, as the second-largest U.S. natural gas producer scrambles to raise cash to close a $9 billion to $10 billion funding shortfall, according to sources familiar with the matter.

One of the sources said that it was a regularly scheduled meeting. But the company is expected to talk about its plans and liquidity needs at the meeting, the sources said, at a time when it is under immense pressure due to low natural gas prices and governance problems.

A company spokesman was not immediately available for comment.

Chesapeake signed a pricey $4 billion loan from Goldman Sachs (GS.N) and Jefferies Group JEF.N earlier this month to give it more time to sell assets to close its funding gap.

Like other natural gas producers, Chesapeake has suffered as prices for the fuel sank to the lowest levels in a decade, shrinking cash flows and raising worries that companies may need to reduce the estimated value of their properties.

The company has also been embroiled in a corporate governance crisis that prompted its move to replace co-founder and Chief Executive Aubrey McClendon as chairman.

Analysts and investors have called for change at the company after Reuters reported that McClendon had taken out more than $1 billion in loans using his interest in thousands of company wells as collateral.

Billionaire investor Carl Icahn, who owns a 7.6 percent stake in the company, has called for the natural gas producer to replace at least four directors, saying the board has failed "in a dramatic fashion" in its oversight of management.

(Editing by Phil Berlowitz)

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