Chesapeake Energy bounces after announcing asset sales to stay afloat

US tight oil and natural gas producer Chesapeake Energy took an axe to its capital expenditure budget on Wednesday and announced asset sales in a bid to boost its financial liquidity and stay afloat in the face of the drastic fall in global oil prices.

"In light of the challenging commodity price environment, our focus for 2016 is to improve our liquidity, further reduce our cost structure and address our near-term debt maturities to strengthen our balance sheet," Chief Executive Doug Lawler said in a statement.

As a result, the US tight oil and natural gas producer slashed its 2016 capex budget from $1.8bn to $1.3bn as it projected full-year revenues to be between flat and down by 5%.

Oklahoma City-based Chesapeake said it had closed or signed $700m in asset sales since the end of 2015 and was targeting a further $500m to $1bn in divestitures in 2016.

That was on top of $500m in net proceeds from the repurchase of three Volumetric Production Payments.

The company reported a net loss of $2.23bn or $3.36 per share for the fourth quarter of 2015, far below the $586m in net profits it obtained in the same period one year ago.

Adjusted earnings per share for the quarter printed at 16 cents, inching past analysts´ estimate for -17 cents.

Revenues slumped from $5.69bn one year ago to $2.65bn, in line with the consensus.

As of 12:54GMT shares in the natural gas and oil exploration and production company were trading 16.44% higher to $2.55, giving it a market capitalisation of $1.59bn, after having lost 89% of their value year-to-date versus a 9% slide for the S&P 500.