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Chesapeake Energy's borrowing limit maintained at $4 billion

Chesapeake Energy Corporation's 50 acre campus is seen in Oklahoma City, Oklahoma, on April 17, 2012. REUTERS/Steve Sisney

(Reuters) - Chesapeake Energy Corp (CHK.N) said its borrowing limit was reaffirmed at $4 billion, at a time when most oil and gas producers are bracing for steep cuts to their credit lines.

Shares of the No.2 U.S. natural gas producer, which said it had to pledge additional assets as collateral, rose 9 percent in premarket trading on Monday.

Every six months, energy companies negotiate their credit limits with banks, based on the value of their oil and gas reserves.

Bill Barrett Corp (BBG.N) said on Monday that its borrowing limit was cut by 11 percent to $335 million.

Oil prices have dropped more than 60 percent from their peaks in June 2014, hitting the profits of most companies in the industry.

Just a few weeks into the current round of talks, over a dozen companies have had their loan limits cut by a total of $3.5 billion, or a fifth of available credit, according to data compiled by Reuters. (http://tmsnrt.rs/1S9304F)

At that rate, $10 billion more of bank credit will disappear as the remaining credit lines of about $50 billion come under scrutiny in talks that stretch into May.

Banks are also relaxing covenants that could have allowed lower classes of lenders to throw borrowers into default and suddenly trigger repayment requirements.

Chesapeake said two of its covenants had been relaxed under the latest agreement and the next review of its borrowing base had been postponed until June 2017.

The company's shares were trading at $4.10 before the bell. Up to Friday's close, the stock had lost nearly three-quarters of its value since the beginning of June 2015.

(Reporting by Anya George Tharakan and Arathy S Nair in Bengaluru; Editing by Kirti Pandey)