NEW YORK (TheStreet) -- Shares of Chesapeake Energy (CHK) closed up 10.15% to $20.29 on heavy trading volume Tuesday after the energy company announced a $1 billion share buyback plan this morning, following its $5 billion asset sale late yesterday.
The oil and gas company's board of directors authorized the common stock repurchase program.
CEO Doug Lawler said that the decision to repurchase is aligned with the company's focus to increase shareholder wealth.
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Late yesterday the company announced that it closed the sale of its assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale to Southwestern Energy (SWN) for $4.975 billion dollars.
The company is expected to reduce its debt by a substantial amount, using funds from this deal to strengthen its financial position.
About 21.71 million shares of Chesapeake Energy traded hands, compared to its average trading volume of about 14.49 million shares.
Separately, 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."