Chesapeake Energy Corp., once a face of the U.S. shale gas revolution, is being pushed off the S&P 500 because its market value has remained below the minimum level required for listing on the large-cap stock index.
As of March 2017, the market cap requirement for listing on the index is $6.1 billion, a level Chesapeake dipped below in late January 2017, when its stock was trading over $6. Chesapeake shares bottomed out at $2.53 on Feb. 9 and have gained 23% in the next month, helped out by fourth-quarter earnings announced Feb. 22 that beat Wall Street's expectations. The company's market cap was below $2.8 billion as of the market close March 9.
On March 5, S&P Global Ratings bumped its rating on nearly $10 billion in debt up a notch, to B, with a stable outlook.

Chesapeake ran up that debt over the past 10 years during the land-grab phase of the shale boom, building leading leaseholds in every major gas shale play, only to see natural gas prices descend to $3/MMBtu or less as the market flooded. Despite a much-touted move to produce more profitable oil and liquids from Texas' Eagle Ford Shale and Wyoming's Powder River Basin, 84% of Chesapeake's average production in 2017 was natural gas.
Chesapeake is also being dropped from other S&P indexes that require S&P 500 membership, including the S&P 500 Oil and Gas Exploration index and the S&P 500 Value index, S&P Dow Jones Indices said after March 9's market close.
Chesapeake will move to the S&P 400 MidCap Index and the S&P MidCap 400 Oil & Gas Exploration & Production index, S&P Dow Jones said. As a result, funds based on S&P 500 membership will be selling Chesapeake stock before the March 19 open, while funds based on the MidCap 400 will be buying.
Replacing Chesapeake is Nektar Therapeutics, a San Francisco-based biotechnology firm with $17.4 billion in market cap as of the March 9 market close.
S&P Global Ratings, S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc.
