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By Samuel R. Avro on Dec 6, 2008 with no responses

Chesapeake Energy Slices Budget, Plans to Build Cash

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The United States’ second-largest independent natural-gas producer has announced that it is cutting its capital budget and plans to build “substantial” cash resources over the next two years.

Chesapeake Energy Corp. has watched its stock plunge 71 percent this year.

The Oklahoma City based company was still reeling from the effect last week’s announcement that the company may issue 50 million shares has had on investors. Shares have tumbled 30 percent since then, with investors worried about share dilution and liquidity.

“Our company is in excellent position to weather the current difficult economic situation in the U.S.,” Chesapeake CEO Aubrey McClendon told a newspaper in Oklahoma.

The massive decline in fuel prices has hurt the energy company which is second only to Devon Energy among independent producers that don’t own any refineries.

The latest move by the company to cut spending is in the hope that it’ll reassure investors. The company will hold a conference call on Monday to discuss their latest plan.