HOUSTON – Chesapeake Energy Corp has paid off more than half of a pricey $4 billion bridge loan after receiving $2.8 billion in cash from the sale of some of its oil and gas properties in the Permian Basin.
The loan, made in May, was a lifeline at the time for the U.S. energy company that was staring at a funding shortfall of about $10 billion. So far this year, Chesapeake has sold about $12 billion of its assets, a situation that has alleviated its liquidity crunch.
Chesapeake's investment bankers on the Permian deal, Goldman Sachs and Jefferies Group provided the loan, which carries a hefty interest rate that will rise more if not paid off by the end of 2012.
The Permian Basin spans west Texas and eastern New Mexico.
(Reporting by Anna Driver; Editing by Leslie Gevirtz)