When your stock price tumbles faster than the cost for a barrel of oil, it’s hard for a company like Chesapeake Energy to give investors something to cheer about.
But the Oklahoma City oil and gas provider did just that, when it said late Monday it would cut spending with a barrel of oil trading below $ 50 and the price for natural gas down 35 percent this year.
Carl Icahn also piqued stockholder interest by buying another chunk of the company’s shares. Regulatory filings show that the activist investor has bumped up his Chesapeake stake to nearly 11 percent from almost 10 percent.
Chesapeake said it now plans $ 3.5 billion to $ 4 billion in capital spending this year, down from its prior estimated budget of $ 4 billion to $ 4.5 billion.
Oil companies have been slashing spending and production due to a steep drop in the price of oil, which is trading around its lowest price in six years.
Chesapeake shares had fallen about 28 percent so far this year, as of Monday’s close, or more than double the drop in oil prices.
But the stock rallied more than 3 percent, or 47 cents, to $ 14.58 shortly before markets opened Tuesday.
