Chesapeake Energy Shares Trade Down on RBC Downgrade

Chesapeake Energy (CHK) - Get Report shares are lower in Thursday's trading session on the heels of an analyst downgrade. RBC lowered shares to UNDER PERFORM from SECTOR PERFORM, largely based on concerns over $2.2 billion in looming debt maturities. The analysts also noted that Chesapeake has another $1 billion in debt come due in both 2019 and 2020, and that much needed free cash flow could be scarce over that period. Chesapeake already has more than $10 billion in total debt and has posted a roughly $450 million net loss over the past 12 months. Just this month, Chesapeake closed a $385 million sale of oil and gas assets to FourPoint Energy. RBC says Chesapeake would be better off selling more of its acreage to shore up cash, pointing to the 42,000 acres it recently sold for $470 million. Chesapeake shares are up about four percent this year on the back of rising oil prices.

This article was written by a staff member of TheStreet.