Chesapeake declares dividend, despite cost-saving

Cash-strapped Chesapeake Energy Corp. will pay out quarterly dividends to shareholders of about $58 million, or 8.75 cents per share, the company said Monday.

The dividend is equivalent to the one Chesapeake issued at the same time a year ago, before many of its major challenges were magnified.

Chesapeake will pay the dividend on Jan. 31 to shareholders of record on Jan. 15.

The announcement came days after Chesapeake said it was offering buyouts to 275 employees as part of a plan to cut costs and improve efficiency.

The nation’s second-largest natural gas producer after Exxon Mobil Corp. has struggled under low natural gas prices, which fell in April to their lowest levels in a decade.

The Oklahoma City-based company has attempted to shift more of its operations into production of oil and other hydrocarbons, taking out loans to fuel that expansion as it trims its natural gas drilling rig count.

But 79 percent of Chesapeake’s production remains in low-priced natural gas and the company’s debt neared $16 billion, according to its most recent quarterly report.

Chesapeake had planned early this year to cut its long-term debt to $9.5 billion. Shares in Chesapeake were trading Monday afternoon at $16.74, up about 1 percent from a day earlier.

The company’s stock remains down about 25 percent since the start of the year. Chesapeake stock nosedived as natural gas prices fell and the company came under intense criticism from shareholders, including pension funds in New York and California.