OKLAHOMA CITY, Feb. 24 (UPI) -- U.S. natural gas company Chesapeake Energy said it would focus on divestments as it trims its spending forecast for 2016 by more than 50 percent.
Chesapeake in early February said it retained the services of long-time counsel Kirkland & Ellis to help manage debt and strengthen its balance sheet, though it said it had no plans to pursue bankruptcy. The company has struggled to perform during the market downturn. Shares are down about 90 percent from their 2013 peak to around $2.20 per share.
The company said in a statement Wednesday it was targeting between $1.3 billion and $1.8 billion in spending for 2016, a 57 percent reduction from last year. Production at most should decline by about 5 percent. Last year, the company said it closed on about $700 million in divestments and was targeting as much as $1 billion more this year.
"Our tactical focus areas remain asset divestitures," CEO Doug Lawler said in a statement. "We are also renegotiating gathering, transportation and processing contracts to better align with our current development plans and market conditions, aggressively working to minimize the decline of our base production and making shorter-cycle investments with our 2016 capital program."
Aubrey McClendon helped establish Chesapeake as a shale oil and natural gas pioneer before he was ousted through an investor rebellion in 2013. Under his tenure, the company became one of the largest natural gas producers in the United States.
The company said fourth quarter net loss was around $2.2 billion. Full-year net loss was around $14.8 billion.
Last month, Chesapeake opted to suspend payment of preferred dividends in order to redirect about $170 million in cash toward its debts.