Under pressure to come up with cash to pay down debt following credit ratings downgrades last week by Moody’s and Standard and Poor’s, Calpine Corp. said last week that it is considering selling all or a portion of its U.S. natural gas assets, which include about 389 Bcfe of proved gas reserves.

Its natural gas assets are primarily located in the Sacramento Basin of California, South Texas and in the Gulf of Mexico, with additional holdings in Colorado, New Mexico and Utah. Its land interests include 386,674 net developed and undeveloped acres and its gas assets currently produce 90 MMcfe/d from 607 net wells.

The independent power producer has seen its stock get hammered in recent weeks after two major Wall Street rating agencies downgraded its credit ratings in the wake of larger than expected first quarter losses. Company officials said they have a program in place to reduce the company’s staggering debt by about $3 billion to about $15 billion.

But there have been concerns in the investment community about the company’s short-term ability to service all of its debt. The company said its lowered credit ratings did not activate any credit triggers. It also has strongly rejected recent bankruptcy rumors, reiterating that it is currently on track to raise $900 million from asset sales and repurchase more than $1 billion in corporate debt.

However, S&P said that liquidity concerns will continue in the immediate future because Calpine’s newest debt instruments restrict its ability to issue new debt or sell assets.

Calpine generates power at plants it owns or leases in 21 states in the United States and three provinces in Canada and in the United Kingdom.

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