Chesapeake Energy shares up after new $3 billion load

Cash is king.

Chesapeake Energy was in the green Monday after it received a new $3-billion loan and the Wall Street Journal said that Carl Icahn may take a stake in the company. Analysts believe Chesapeake will have a funding gap of $10 billion this year, and is currently looking to sell properties in the Permian Basin and Mississippi Lime Field which are expected to generate $9.5 to $11 billion this year.

The $3-billion loan facility, funded by Goldman Sachs (GS) and Jefferies Group (JEF), will help pay down an existing debt facility and give Chesapeake more breathing room to complete the planned asset sales. Some were worried that Chesapeake may struggle to get the sales done; although CEO Aubrey McClendon said on a conference call that the he was confident the sales would be complete.

Separately, The Wall Street Journal reported, citing sources close to the matter, that Carl Icahn may take a stake in the company. Icahn first invested in Chesapeake in 2010, but sold after shares spiked following a $5-billion asset sale. Commenting on the report, McClendon said, “We have seen that (report) and wouldn’t be surprised if Carl became a large shareholder. He made, I think over $500 million, and he called me to thank me.”

Chesapeake Energy (CHK : NYSE : US$15.52), Net Change: 0.71, % Change: 4.79%, Volume: 77,605,817

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Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

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