UPDATE 2-Chesapeake Energy cuts share sale amount to 25 mln
(Recasts; adds background, details about share sale, capex plan)
Dec 8 (Reuters) - Chesapeake Energy Corp (CHK.N: Cotización), seeking to calm investors fears about liquidity and share dilution, will reduce the number of shares it planned to issue to pay for assets, businesses or securities of other companies.
On Friday, shares of the U.S. natural gas company fell to their lowest level in at least five years, still reeling from an announcement the previous week that the company may issue 50 million shares, which prompted investor worries about liquidity and share dilution.
On Sunday, the company, which believes it has ample financial liquidity, said it will reduce the number of shares it may issue to 25 million.
The company will also end distribution agency agreements it has with three securities firms.
Last month, the company said in a filing with the U.S. Securities and Exchange Commission that it has signed distribution agency agreements and may sell up to $1 billion of common shares through Credit Suisse, Morgan Stanley and UBS.
The company said its intention had been to create financial flexibility for an uncertain economic and commodity market environment over the next few quarters, but in hindsight realized it made a mistake.
Chesapeake Energy, which plans to build up to $4 billion in additional cash resources over the next two years, on Sunday also cut its capital expenditure plans for 2009 and 2010 amid turbulent financial markets and increased uncertainty about the U.S. economy and natural gas and oil markets.
The cut in capital expenditure is aimed at achieving a cash neutral budget that does not depend on future asset sales, the company said. Continuación...