Chesapeake Energy Raises 2016 Asset Sales Goal

Debt-laden Chesapeake Energy Corp, the No. 2 U.S. natural gas producer, raised its 2016 asset sales target and production forecast and said it expected capital spending this year to be at the higher end of its forecast range.

Shares of the company, which reported a bigger-than-expected quarterly loss, fell about 3 percent to $5.14 in premarket trading on Thursday.

The company raised its asset sales target to more than $2.0 billion from $1.2 billion-$1.7 billion as it looks to reduce its crippling debt burden and cope with weak oil and gas prices.

Chesapeake said it expected to sell "selected" Haynesville Shale acreage, located in northwest Louisiana.

"Financial discipline remains our top priority, and we continue to work toward additional solutions to improve our liquidity, reduce our midstream commitments and enhance our margins," Chief Executive Doug Lawler said in a statement.

The company, which had long-term debt of $8.62 billion at the end of June, said it had reduced debt by more than $1 billion so far this year.

Chesapeake undertook a couple of debt-for-equity swaps, or bond swaps, this year to reduce interest payments and debt taken to fund shale development.

The company raised its full-year 2016 production forecast by about 3 percent, but maintained its spending budget of $1.26 billion-$1.76 billion.

Chesapeake said it now expected to produce 605,000-635,000 barrels equivalent per day (boe/d) this year, higher than the 625,000-650,000 it had forecast earlier.

Production volumes are expected to fall 5 percent in 2017, the company said.

Net loss attributable to Chesapeake's shareholders narrowed to $1.79 billion, or $2.48 per share, in the second quarter ended June 30 from $4.15 billion, or $6.27 per share, a year earlier, when it took a $5 billion impairment charge.

Excluding items, the company had a loss of 14 cents per share, bigger than the 10 cents analysts on average had expected, according to Thomson Reuters I/B/E/S.

These items included a $1.05 billion impairment charge and unrealized hedging losses of about $544 million.

Total revenue more than halved to $1.62 billion, missing the average estimate of $1.93 billion.

Reporting by Swetha Gopinath