Another Spending Spree at Chesapeake Energy?
Chesapeake Energy intends to increase its exploration and production budgets for 2009 and 2010 by $400 million and $300 million. Although not known for its financial discipline in the last several years, the natural gas producer insists it can cover its capital spends through asset monetizations, joint ventures, and increased production. Chesapeake has demonstrated some success with asset sales to date, but can the company live within its cash resources if weak natural gas prices persist during the next two years? Chesapeake’s strategy is focused on discovering, acquiring and developing conventional and unconventional natural gas reserves onshore in the U.S., primarily in the “Big 4” natural gas shale plays: the Barnett Shale in the Fort Worth Basin of north-central…
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