Chesapeake Energy Corp.’s stock price jumped on Monday after the company secured a $3 billion term loan and CEO Aubrey McClendon expressed confidence in the company’s ability to complete planned property sales this year to bridge an estimated $10 billion funding gap. In addition, an estimated $1 billion volumetric production payment (VPP) in the Eagle Ford Shale has been sidelined in favor of more noncore asset sales.

“We will get our asset sales done,” McClendon told energy analysts during an early morning conference call.

The CEO’s enthusiasm and news of a $3 billion unsecured loan appeared to inspire investors to send the share price up around 9% in midday trading Monday in an otherwise down market, but the trading was tempered in the afternoon; shares ended up 4.79%, closing at $15.52 with 75 million shares trading hands, triple the average. The stock had plunged on Friday by nearly 14% after Chesapeake stated in a Form 10-Q filing that low gas prices could delay asset sales this year, stretching its ability to comply with credit covenants (see Shale Daily, May 14).

However, late Friday Chesapeake completed a $3 billion unsecured loan with Goldman Sachs Bank USA and affiliates of Jefferies Group Inc., with the net proceeds to be used to repay the company’s revolving credit facility.

“We firmly believe this term loan answers the most important question about Chesapeake in the marketplace today,” McClendon said. The producer will have “enough financial firepower to be able to complete our pending asset sales…to finish our transition to a more liquids-focused producer.”

The term loan ensures “flexibility” through the summer that Chesapeake will be able to go forward with its planned sales of assets in the Permian Basin and complete a joint venture (JV) in the Mississippian Lime.

“We now have substantially enhanced our liquidity and that will ensure we can complete our asset monetization transactions from a position of strength,” said McClendon. “We remain on track to reach $9.5-11 billion in asset sales this year.”

The Goldman/Jefferies term loan is to be paid off once Chesapeake completes the prized Permian portfolio sale, which could fetch up to $8 billion, as well as the JV. The Permian package may be sold to one party or split into a package of three, the CEO told analysts.

The Permian properties were to be sold before Chesapeake and McClendon became the subject of scrutiny in the past month, and the data room is opened with buyers waiting in line, the CEO noted.

The third leg of the 2012 monetizations, a planned VPP in the Eagle Ford Shale, has been canceled. The VPP was to have given Chesapeake an estimated $1 billion in proceeds and was considered “a key element of our 2Q2012 financial plan.” Basically, a VPP gives the buyer a share of a leasehold’s produced oil or gas in exchange for an upfront payment. While it gives the seller upfront cash, it delays the producer’s output over a period of time, since that is directed to the buyer.

Chesapeake already has 10 VPPs in place for some of its onshore leaseholds, in which it has publicly disclosed that it has received $6.4 billion. The Wall Street Journal reported last week that Chesapeake has about $1.4 billion of unreported liabilities over the next decade associated with the VPPs, beginning with $300 million this year and in 2013.

Instead of participating in another VPP, “we’ve identified other assets that are noncore to the company that will enable us to reach…our [sales goal] for the remainder of the year,” McClendon said. “We will sell sufficient assets in 2013 to make sure we are well funded next year and reach our goal to be cash flow positive and get our funding issues behind us once and for all.”

Chesapeake has had to spend a lot to transition from being the second largest gas producer in the United States to being a liquids-focused operator, and it has used a variety of transactions in the past few years to achieve its goals — JVs, VPPs and outright sales.

“It takes money to make money,” McClendon said. The transition should be completed by 2014, he said, and if more assets need to be monetized, he said it would be “fairly easy” go to through the company’s huge portfolio to find attractive assets that could be sold or monetized in some way.

Asked if the rumors were true that activist investor Carl Icahn had retaken a stake in Chesapeake, as some media outlets were reporting on Monday, McClendon said he “wouldn’t be surprised.” Icahn made an estimated $500 million in Chesapeake when he invested in the company in 2010, the CEO noted (see Shale Daily, Dec. 22, 2010). “He called me to thank me when it was over,” McClendon told investors. “If he comes in, I’m pretty confident he’ll make a lot of money.”

However, when Icahn bought close to 6% of Chesapeake’s shares in late 2010, he came in and criticized McClendon and the board for what he called out-of-control spending, and he pressured management to make changes. Two months later Chesapeake sold all of its considerable Fayetteville Shale portfolio, about 487,000 net acres, as well as its equity in hydraulic fracturing supplier Frac Tech Holdings LLC and privately held explorer Chaparral Energy Inc. (see Shale Daily, Feb. 8, 2011). The deal at the time sent the company’s stock price to a 52-week high of $31.43.

McClendon during the conference call spent a few minutes praising Chesapeake’s assets, which he valued at $50-60 billion. “When gas prices recover in 2013 and beyond, it should be significantly higher and we will deliver even more value to our shareholders.”

This year Chesapeake is “moving from asset capture to asset harvest,” he noted. Over the past seven years the company has participated in an “asset resource revolution,” but the transition to more liquids plays, begun two years ago, “has not been easy with gas prices at 10-year lows.”

There is “no CEO more determined or motivated than I am. I understand fully where we are, where we’ve been and where we are going.”

According to Canaccord Genuity’s John Gerdes and Ryan Oatman, the Goldman/Jefferies term loan is repayable anytime this year without penalty “at par value” because it doesn’t mature until late 2017 and thus proves a positive for Chesapeake. The duo previously had forecast that Chesapeake would be fully drawn on its revolver in 3Q2012, which put liquidity as their top concern above corporate governance.

“This loan fully assuages the mounting liquidity concerns and also puts Chesapeake in a better negotiating position for its planned asset sales,” said Gerdes and Oatman. “We believe Chesapeake needs to hit the low end of its $9-11.5 billion monetization target to achieve its goal of $9.5 billion in net debt at year-end 2012. This should occur as the Permian Basin alone is worth $7 billion in our view ($75,000/boe/d-plus and $3,000/acre).”

Noting the positive jump in Chesapeake’s shares Monday, Motley Fool’s Travis Holum warned that “a ton of uncertainty” continues to surround “McClendon, as well as the company’s financial position, so any pop or drop should be taken with a grain of salt. Investors are now calling for McClendon to be fired and that may provide another pop, but an estimated $10 billion funding gap this year will keep me from buying anytime soon. Chesapeake will have to sell assets at a discount because of low natural gas and now oil prices, and I wouldn’t want to buy in until there’s some clarity surrounding the company’s financial future.”