S&P Global Ratings placed Chesapeake Energy Corp. on positive CreditWatch following the company's announcement that it plans to exit the Utica Shale and shift its focus to more oil-laden plays.
S&P could move its unsecured debt rating on Chesapeake up one notch to B- from CCC+.
Chesapeake recently announced that it has agreed to sell its entire operating position in the dry gas Utica Shale in Ohio for up to $2 billion, with part of the proceeds to be used to pay down debt. S&P's move would depend on how much and what kind of debt the company pays down.
S&P also expects the company's financial measures to improve upon the transaction's closing but stay close to the rating agency's expectations for its current rating, which includes funds from operations to debt between 12% and 20%, according to a July 27 news release.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found in the Sources section.