Chesapeake’s $1.2 bn loans rely on dwindling output

OKLAHOMA CITY, Oklahoma (Bloomberg) -- Dwindling production from Chesapeake Energy Corp.’s natural gas fields is undermining fuel sales backing more than $1.2 billion in loans and notes. Output from 3,300 Chesapeake-operated wells in the Sahara field of northern Oklahoma was 12% below projections during the six-month period ending in February, Moody’s Investors Service said in a note to clients. As a result, the so-called production coverage ratio on the Glenn Pool Oil & Gas Trust five-year loan and 10-year notes declined to 1.18 from 1.29, the credit-rating firm said.