Chesapeake declined to comment on the issue.
The sale of all of Chesapeake’s interest in Chesapeake Midstream Partners LLP would allow the company to quickly repay its costly $4 billion unsecured loan and help the company make strong strides toward meeting its goal of selling $9.5 billion to $11 billion in assets by the end of the year.
“If that is the case, it shows clearly that although Chesapeake is cash poor, it is an asset-rich company,” said Fadel Gheit, an industry analyst with Oppenheimer in New York. “They have proved over and over again that those who doubted the company’s asset value are wrong.”
Chesapeake shares gained $1.21, or 7.1 percent to close at $18.21, far outpacing the broader SP 500, which gained 2.3 percent on the day.
While the sale would be a strong step toward helping the company meet its goal of raising money to fund its transition to oil instead of natural gas, it doesn’t solve every problem, Gheit said.
“Chesapeake is not out of the woods yet,” he said. “You still need to invest in investor confidence and take care of all this distraction, allegation and get to the bottom of things. But I think the recent changes are changes to the positive.”
Still, the sale would be good news for a company that hasn’t seen much lately, Tulsa money manager Jake Dollarhide said.
“This is great news because it shows that Chesapeake has options,” said Dollarhide, CEO of Longbow Asset Management Co. “They are not forced to sell natural gas exploration and production assets at basement prices, and certainly midstream assets are an area of strength.”