Moody's boosts outlook for Chesapeake to 'Stable'
Moody's lifts outlook for Chesapeake Energy to 'Stable,' predicts improvements
NEW YORK (AP) -- Moody's Investors Service on Tuesday revised its rating outlook for Chesapeake Energy Corp. to "Stable" from "Negative," predicting that the company will be able to improve its debt profile this year and in 2014.
The credit rating service also affirmed the Oklahoma City-based natural gas company's speculative grade "Ba2" corporate family rating and "Ba3" senior unsecured debt ratings.
Moody's Vice President Pete Speer said Chesapeake should get a boost from a combination of reserve and production growth and debt reduction. He also noted that the company has made significant progress in reducing its capital spending, hedging its natural gas exposure and increasing its cash availability.
Moody's said that Chesapeake benefits from its very large proved reserve and production scale, sizable high quality acreage positions in multiple basins across the U.S. and low operating costs. But at the same time, it has a hefty debt burden stemming from a long history of rapid growth through acreage acquisitions and capital spending that significantly exceeded cash flows.
Chesapeake continues to sell assets to pare down its debt burden and has said it plans to sell $4 billion to $7 billion in assets this year.
Chesapeake shares fell 47 cents, or 2 percent, to $21.71 in afternoon trading.
