NEW YORK (TheStreet) -- Chesapeake Energy (CHK) shares are up 4.8% to $19.30 in pre-market trading on Tuesday after the energy company announced a $1 billion share buyback just hours after the company announced a $5 billion asset sale after the closing bell yesterday.
Yesterday the company announced the sale of $5 billion worth of natural gas assets in the Pennsylvania and West Virginia regions. The company sold about 413,000 net acres of land intended for shale exploration including about 1,500 wells that produced about 57,000 barrels of oil equivalent a day.
CEO Robert Douglas Lawler said that the share repurchase would be used to return capital to its investors as well as pay down the company's debt. The company has about $9 billion in cash reserves.
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TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHESAPEAKE ENERGY CORP (CHK) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."