Chesapeake details plans to refinance debt

Oklahoma City-based Chesapeake Energy Corp. is working to improve its balance sheet by essentially refinancing up to $2.3 billion in senior notes.
by Adam Wilmoth Published: March 19, 2013

Credit ratings agency Moody's Investors Service on Monday assigned Chesapeake's new notes a Ba3 debt rating, which is three notches below investment-grade.

Moody's also gave the debt a negative outlook.

“The negative outlook highlights our concern regarding the company completing sufficient asset sales this year to both fund its capital expenditures and meaningfully reduce debt,” Moody's said in a statement.

Chesapeake has said it needs to sell $4 billion to $7 billion in assets this year to fully fund its planned drilling program.

“While this funding gap is much lower than 2012, we are concerned that the company may be challenged to sustain its overall production levels as forecast with the lower level of capital investment,” Moody's stated.

Chesapeake in 2012 completed almost $12 billion in asset sales.

Last month, the company announced a $1.02 billion joint venture with Chinese oil company Sinopec International Petroleum Exploration and Production Corp. in the Mississippi Lime of northern Oklahoma and western Kansas.

Chesapeake shares slipped 29 cents, or 1.3 percent, Monday to close at $22.17 on the New York Stock Exchange.

by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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Also ...

Threat of cyber attacks listed

Chesapeake Energy Corp. on Monday warned investors about potential cyber attacks.

Listed among a 14-page section on potential risks affecting Chesapeake and its debt offerings, the Oklahoma City oil and natural gas company said it has been “the subject of cyber attacks on our internal systems and through those of third parties, but these incidents did not have a material adverse impact on our results of operations.”

Specifically, Chesapeake said “unauthorized access to our seismic data, reserves information or other proprietary or commercially sensitive information could lead to data corruption, communications interruptions or other disruptions in our exploration or production operations or planned business transactions.”

A Chesapeake spokesman on Monday declined to comment about any specific hacking incident.

Hacking as a means of corporate espionage has become a growing concern in recent years.

The U.S. Securities and Exchange Commission in 2011 said companies must report material losses from hacking attacks, including any information “a reasonable investor would consider important to an investment decision.”

Chesapeake's reference to the risks of potential cyber attacks first appeared in the company's annual regulatory report released March 1.

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