Chesapeake Energy cuts planned capital spending for 2015 by $500M, citing lower price of oil

Chesapeake Energy cut its capital spending goals on Monday, citing the lower price of oil.

The Oklahoma City company also said it is lowering its production targets, saying it wants to spend its money in a prudent fashion.

The company is now planning $3.5 billion to $4 billion in capital spending this year, down from its prior estimated budget of $4 billion to $4.5 billion.

Chesapeake Energy Corp. expects to produce 231 million to 236 million barrels of oil equivalent in 2015, down from 235 million to 240 million barrels.

Oil companies are cutting spending and production because of a steep drop in the price of oil, which has plunged since mid-2014 and is trading around its lowest price in six years.

Shares of Chesapeake Energy rose 3.7 percent to $14.11 Monday and were unchanged in after-hours trading. The stock has dropped 40 percent over the last 12 months.