UPDATE 2-Chesapeake plans $500 mln debt offering, shrs off
* Sees Q4 $1.8 billion charge
* Ended year with $1.75 billion cash
* Plans to issue $500 mln in debt
* Shares down 2.5 percent (Recasts first paragraph, adds debt offering, byline, analyst comment)
By Anna Driver
HOUSTON, Jan 27 (Reuters) - Chesapeake Energy Corp (CHK.N) said on Tuesday it plans to offer $500 million in debt, although the U.S. natural gas producer told investors last month it had no plans to tap capital markets.
The Oklahoma City, Oklahoma company also expects to take impairment charges totaling $1.8 billion in the fourth quarter and ended the year with $1.75 billion in cash, less than the $2.5 billion it projected in December.
"It just shows me that management is losing its credibility," Phil Weiss, energy analyst Argus Research said. "They keep telling us they are slowing down, but they are still acting like a growth company. I don't get it anymore."
Chesapeake shares fell 2.5 percent in after-hours trading.
A spokesman for the company could not immediately be reached for comment.
"We will continue to carefully manage our corporate liquidity and capital spending levels to protect value and safely navigate the current challenging economic environment," Aubrey McClendon, the company's chief executive said in a news release.
Chesapeake said it plans to use the proceeds from the debt offering to pay down its revolving credit facility.
In December, Chesapeake backtracked on a plan to raise cash by selling new shares after investors pummeled its stock price. At the time, McClendon apologized for misjudging the market and said the company had no plans to issue shares or debt in 2009 or 2010.
In 2008, Chesapeake -- which carries about $12 billion in debt on its books -- spent heavily to acquire acreage and leases in sought after shale gas deposits such as the Haynesville deposits in Louisiana. The credit crisis and a steep drop in commodity prices left the heavily leveraged company scrambling to shore up its liquidity.
Citing lower commodity prices, Chesapeake expects to take an after-tax, non-cash impairment charge to natural gas and oil properties of about $1.7 billion for the 2008 fourth quarter. The company also sees $100 million in charges related to the writedown of certain investments.
Chesapeake estimated its year-end 2008 proven reserves were about 12.1 trillion cubic feet equivalent, in line with earlier projections.
The company's shares closed down 16 cents at $15.64 (Reporting by Anna Driver in Houston; Editing by Andre Grenon)
