Analyst: Major Asset Sales a Likely Necessity for Chesapeake Energy

From Seeking Alpha:
The combination of sharply reduced EBITDA and high leverage level, including non-debt liabilities, results in credit metrics that are uncomfortably stretched and limit Chesapeake's ability to develop its asset base at a reasonable pace. 
On the other hand, Chesapeake's asset portfolio is extensive and opportunity rich. 
The Marcellus South divestiture that substantially improved Chesapeake's balance sheet position provides a strategy template that is very compelling, given the company's current challenges. 
Chesapeake's comments on the conference call that the company may be open to various alternatives with regard to its assets does not come as a surprise. 
I should add that divestiture initiatives are likely to be strategic in nature, similar to the move to sell Marcellus South, as it is the only way for Chesapeake to address risks related to protracted commodity price weakness.
Click here to read much more about the difficult circumstances that Chesapeake finds itself in.

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