Chesapeake Energy Corporation Plans To Sell Off Assets

The oil digging company is to carry out a major plan to sell of its assets to cover the losses it has so far made due to the downturn in the energy sector.

Chesapeake Energy Corporation has recently announced that it will be doing a major selloff of its assets soon, which is being taken as a much needed step by the oil giant. The energy sector on a global level has been experiencing some major downs lately which have made all the related companies in the industry think of quick strategies to overcome the losses they experience over the course of time. In the same way, the oil service providers have also carried out some important steps to cover the losses, among which selling off its assets has emerged to be an important one by the giant.

Following the decrease in oil prices, the decrease in the services provided by Chesapeake has also been observed. According to related report, the oil company is currently working towards cutting down its costs along with observation of suspension of dividend payment to save itself in this difficult time. However, the strong earnings report that was recently reported by the oil digging giant cannot be ignored, as it managed to beat estimations by a huge difference.

The estimate for EPS was made at -$0.136 by the analysts on the Street, but Chesapeake stock reported the earnings per share to come around -$0.050 which was much better than the expected loss. However, the revenue reported by the company almost missed the predictions but managed to sustain its value on the index. The giant might seem to be doing well on the front, it cannot be denied that there are some persistent issues erupting from the oil services provider’s end which majorly can be seen in the capital structure on which the whole business plan of the oil diggers stand.

Furthermore, analysts at the Credit Suisse equity giant have advised the company to start working on deleveraging its structure, which is the only solution that can be thought of that will help the oil giant the most. This is why the company has decided to start selling off its assets to begin levering off the $10 billion debt it is currently in.

This debt will not be handled only by selling assets but by also cut down on excessive spending and to carry out more projects in joint collaborations with other companies. The oil company believes that these are some of the major steps it can take to sustain the downing position it has been experiencing for some time now. As per report, it is also looking to sell off major parts of its assets to make sure it does not fail as an energy giant in the industry.