By Chelsey Dulaney
Chesapeake Energy Corp. said Tuesday that it will eliminate its
shareholder dividend starting in the third quarter and redirect the
money to capital spending, the latest round of cutbacks for the
U.S. shale driller.
Shares of Chesapeake, down 48% this year, fell 1.2% to $10.15 a
share in premarket trading.
Chesapeake estimated that getting rid of the annual dividend of
35 cents a share will save the company $240 million a year. The
company plans to use the money for its 2016 capital program.
Chesapeake said it has also agreed to sell some properties to
FourPoint Energy LLC.
Chesapeake has struggled to recover from years of aggressive
spending as the land-grab approach the company pioneered for oil
and gas drilling meant it spent more than its wells generated in
profit. But under Doug Lawler, who joined as chief executive in
June 2013, the company has been selling assets to pay down its
debts.
The company has also reduced its rig operations and cut its
capital spending amid falling oil and natural gas prices.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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