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Chesapeake Says Top Investor NGP Distributed Shares to Partners

Carlos Caminada

(Bloomberg) -- Chesapeake Energy Corp., the U.S. natural gas producer that’s struggling under the burden of a high debt-load and low prices, said its second-biggest investor distributed its stake to its limited partners.

NGP Energy Capital Management LLC “made an in kind pro rata distribution of the shares” to partners of its funds, Oklahoma City-based Chesapeake said in a statement late Tuesday. The statement made no further clarification, and calls and messages to Chesapeake and NGP after normal business hours weren’t immediately returned.

NGP held a 16% stake with a market value of $208.2 million. The private equity firm became a major shareholder after Chesapeake bought WildHorse Resource Development for $1.86 billion this year.

Chesapeake’s shares have tumbled 68% so far this year. They plunged to less than $1 last week after the company warned it may not be a viable “going concern” if low oil and gas prices persist. The company, once worth more than $30 billion, is now valued at about $1.3 billion. Its stock fell again Tuesday, dropping 17%.

Its current capital and operating program, along with a planned 30% reduction in capital expenditures in 2020, will strengthen the financial position of the company for the long term, Chesapeake said Tuesday.

“We have substantial liquidity with no significant near-term maturities,” Chief Executive Officer Doug Lawler said in the statement.

--With assistance from Rachel Adams-Heard.

To contact the reporter on this story: Carlos Caminada in Calgary at ccaminada1@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Joe Carroll

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