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Largest US Natural Gas Producer Runs Out Of Cash
Chesapeake Energy Corp., the nation's largest producer of natural gas, seeks to raise up to $1.8 billion through common stock sales in an effort to fund its drilling and exploration activities and mitigate the impact of lower natural gas prices on cash flow.In two filings with the Securities and Exchange Commission late Wednesday, the company said it will issue shares worth as much as $1 billion before fees and also registered 50 million shares worth at most $791 million for potential sale. Oklahoma City, Okla.-based Chesapeake said it will use proceeds from the $1 billion offering for general corporate purposes, including fund exploration, development and other capital expenditures. The move would dilute holdings of shareholders, who already suffered through a substantial decline in Chesapeake's stock price this year. Shares closed at $20.24 on Wednesday, off 73 percent from the stock's $74 52-week high set this summer. But the company said cash flow, borrowings and cash on hand have not been enough to pay for capital expenditures. Chesapeake has used up the remaining financing available under its $3.5 billion bank credit facility and only $251 million is left of another $460 million credit line. Credit markets remain tight with financial institutions under duress. Posted by: Anonymoose 2008-11-28 |
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