Chesapeake Energy raises asset sales target for 2016

(Reuters) - Debt-laden Chesapeake Energy Corp CHK.N, the No.2 U.S. natural gas producer, raised its asset sales target and production forecast for the year, keeping its capital budget unchanged.

Chesapeake Energy Corporation's 50 acre campus is seen in Oklahoma City, Oklahoma, on April 17, 2012. REUTERS/Steve Sisney

The company, which has been struggling to cope with weak oil and gas prices, raised its asset sales target to more than $2.0 billion from $1.2 billion-$1.7 billion.

Chesapeake said on Thursday it expected to sell “selected” Haynesville Shale acreage, located in northwest Louisiana.

“Financial discipline remains our top priority, and we continue to work toward additional solutions to improve our liquidity, reduce our midstream commitments and enhance our margins,” Chief Executive Doug Lawler said in a statement.

The company, which had long-term debt of $8.62 billion at the end of June, said it had reduced debt by more than $1 billion so far this year.

Chesapeake undertook a couple of debt-for-equity swaps, or bond swaps, this year to reduce interest payments and debt taken to fund shale development.

The company raised its 2016 production forecast by 3 percent.

Net loss attributable to Chesapeake’s shareholders narrowed to $1.79 billion, or $2.48 per share, in the second quarter ended June 30 from $4.15 billion, or $6.27 per share, a year earlier, when it took a $5 billion impairment charge.

Excluding items, the company had a loss of 14 cents per share, bigger than the 10 cents analysts on average had expected, according to Thomson Reuters I/B/E/S.

Total revenue more than halved to $1.62 billion, missing the average estimate of $1.93 billion.

Reporting by Swetha Gopinath in Bengaluru; Editing by Kirti Pandey