UPDATE 1-Chesapeake sees at least $2 bln from asset sale

* Expects at least $2 bln from Marcellus stake sale

* CEO says overleveraged position ‘a rounding error’

* Shares climb 2.5 pct

NEW YORK, May 11 (BestGrowthStock) – Chesapeake Energy Co (CHK.N: )
said on Tuesday that it expected to receive at least $2 billion
from the sale of a stake in its Marcellus Shale properties as
part of its latest plan to raise cash.

Chesapeake announced on Monday evening that it planned to
raise money to pay down $3.5 billion of its debt, which
totalled more than $12 billion at the end of March, to raise
its credit rating.

Based on prevailing prices for properties, the company’s
net asset value should be $56 billion, far higher than its
current $14.3 billion market capitalization, Chief Executive
Officer Aubrey McClendon said.

“We believe the only remaining obstacle holding us back
from achieving an equity valuation closer to this $56 billion
of net asset value is our debt load,” he said on a conference

The company will sell a 20 percent stake in its Appalachia
business, which includes the Marcellus properties, and has
placed $600 million of nonvoting convertible preferred stock
with a unit of Singapore state investor Temasek Holdings
[TEM.UL] and Chinese private equity firm Hopu.

Temasek and Hopu also have the option to place another $500
million worth of Chesapeake preferred stock.

Chesapeake’s debt has ballooned in recent years as the
company has grown into one of the largest U.S. natural gas
producers, but as the price of this fuel weakens, it is now
turning to produce more oil and liquids.

McClendon said the company’s growth plans would make it far
more valuable in the coming year, even as he downplayed
Chesapeake’s debt load.

“I think that to build a stronger financial foundation will
give us the opportunity for people to stop worrying about
whether or not we’re overlevered by $3 billion or $4 billion,
which frankly is a bit of a rounding error in the ultimate
scheme of things,” he said.

Shares of Chesapeake rose 2.5 percent to $23.67 on the New
York Stock Exchange.

Stock Market Advice

(Reporting by Matt Daily; Editing by Lisa Von Ahn)

UPDATE 1-Chesapeake sees at least $2 bln from asset sale