How Did Chesapeake Sell $12 Billion of Assets & Still Increase Its Debt?

From Seeking Alpha:
Net debt, including negative working capital, now totals $17.1 billion! It has increased by $4.1 billion, despite the huge dollar amount raised through assets sales.
That is pretty crazy. Over $12 billion in assets sold, and debt still increases. What happened?
Two things:
The first is that with unhedged natural gas production for almost all of 2012 and extremely low natural gas prices, Chesapeake basically had no operating cash flow for the entire year. Through the third quarter, Chesapeake had only $1.9 billion in cash flow from operations.
The second factor is that in an effort to make a transition from natural gas to more profitable liquids production, Chesapeake has had to spend a lot of money on development. Through just the end of the third quarter, Chesapeake had spent these amounts on development:
- $7.4 billion on well costs
- $2.6 billion on acquiring land
- $1.9 billion on additions to property and equipment
Read the entire article here. 

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