After spending big in the nation’s gas shale patch — and taking some heat for it — Chesapeake Energy CEO Aubrey K. McClendon said Thursday it is time for the company to reap what it has sown in announcing the Oklahoma City-based producer’s plans for this year and next.

Chesapeake has significant unconventional gas holdings in the Marcellus, Haynesville, Eagle Ford, Fayetteville, Barnett and Bossier plays, as well as positions in the Anadarko, Powder River and Permian basins.

Following its “25/25 Plan,” Chesapeake said it will cut long-term debt by 25% over the next two years by reducing leasehold spending and through asset monetizations, which will reduce the company’s planned two-year production growth rate to 25% from its previously planned 30-40% growth rate. McClendon said the company does not intend to issue any common or preferred shares to cut debt.

“This plan represents a fundamental shift from our aggressive asset accumulation of the past few years to a multi-year period of asset harvest, characterized by a clear focus on capital discipline and maximizing returns,” McClendon said. “We believe we have assembled the best assets in the U.S. and have the technology, experience and financial and human capital to convert these assets into rapidly growing production, proved reserves and cash flow. Successful execution of our 25/25 Plan should very substantially reward our shareholders in both the short and longer term.”

Analysts at Tudor, Pickering, Holt & Co. Securities Inc. called Chesapeake’s new game plan “big news,” noting that the 25/25 plan equates to $3 billion in debt reduction. “Is the strategic shift a response to shareholders?” they queried.

The acquisitive producer has taken fire from some quarters of late for overspending. Late last year it came to light that activist investor Carl Icahn had been buying up Chesapeake shares (see Shale Daily, Dec. 22, 2010). At about the same time, analysts were dinging Chesapeake for “profligate spending” (see Shale Daily, Dec. 6, 2010).

Chesapeake’s daily production for the fourth quarter averaged 2.9 Bcfe, a decrease of 4% from the 3 Bcfe/d produced in the preceding quarter and an increase of 11% from the 2.6 Bcfe/d produced in the year-ago period.

At the end of the 3Q2010 the company sold future production through a volumetric production payment covering a portion of its Barnett Shale assets, including approximately 350 MMcfe/d in 4Q2010. Excluding this sale, the company’s 4Q2010 production would have increased 7% sequentially and 25% year over year.

Chesapeake’s average daily production for 4Q2010 consisted of 2.6 Bcf of natural gas (88% on a natural gas equivalent basis) and 59,500 bbl of oil and natural gas liquids (NGL) (12% on a natural gas equivalent basis). For 4Q2010 the company’s year-over-year growth rate of natural gas production was 5% and its year-over-year growth rate of oil and NGL production was 100%.

Full-year 2010 production averaged 2.8 Bcfe, an increase of 14% from the 2.5 Bcfe/d produced in 2009. Last year was the company’s 21st consecutive year of sequential production growth, Chesapeake said.

Chesapeake reported a preliminary estimate of year-end 2010 proved reserves of 16.9 Tcfe, an increase of approximately 2.6 Tcfe, or 18%, over its year-end 2009 estimated proved reserves of 14.3 Tcfe. Growth occurred despite net divestitures of approximately 1.4 Tcfe of proved reserves during 2010.

During 2010 the company added 4.8 Tcfe of proved reserves through the drillbit at an estimated drilling and completion cost of less than $1.15/Mcfe and added approximately 200 Bcfe of proved reserves associated with positive price-related revisions. Chesapeake said it replaced its 1 Tcfe of production with approximately 3.6 Tcfe of proved reserves for a net proved reserve increase of 2.6 Tcfe and a proved reserve replacement rate of approximately 350%.

The company said it has hedged approximately 96% of its expected 2011 gas production at the average price of $5.84/Mcf and has hedged approximately 17% of its expected 2012 gas production at the average price of $6.19/Mcf, including 29% of its expected gas production in the first half of 2012 at the average price of $6.19/Mcf.