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In the process of revising the long-term 50 Picks portfolio and selling my short-term position, I seem to have deleted the entry for Chesapeake Energy (CHK) in my long-term Jubak 50 portfolio.

It should still be that portfolio–even though I’ve sold it out of the 12-18 months Picks portfolio on the recent rally. I’ve lost the purchase date (and hence the price) and the original post. Anybody who can point me to a date would be doing me a huge favor.

Until then, to reopen the position in the 50 Picks portfolio, I’m reporting this post as a place holder. I’ll be using the June 7, 2013 price as a placeholder too since that’s when I did the most recent buy for the 12-18 month portfolio.

When markets are expecting you to declare bankruptcy, it’s pretty easy to surprise to the upside.

Chesapeake Energy (CHK), which had plunged when markets assumed that it had hired financial advisors to prepare for a bankruptcy filing–which the company denied–surged 23% today on news that it had agreed to sell $700 million in natural gas and other assets instead of the $200 million to $300 million the company had projected in December. The extra cash will be used to pay off $500 million in debt coming due in three weeks. The company also announced that it plans to sell another $500 million to $1 billion in assets in 2016.

The extra cash goes especially far in paying down debt because Chesapeake has been able to buy back bonds on the market at deeply distressed prices. The company bought about $240 million of notes due next month at a 95.7 cents on the dollar and also bought bonds maturing in 2017 for 45% of face value.

The company also announced further cuts to its capital spending with plans to shut down at least half the drilling rigs it has under contract. Chesapeake will put about 70% of its capital spending to use in finishing already-drilled wells rather than starting new ones. The company’s capital spending budget will be $1.3 billion to $1.8 billion in 2016, 57% less than in 2015.

The news about asset sales and debt reductions came as part of Chesapeake’s fourth quarter earnings report today. The company reported a fourth-quarter loss of $2.2 billion or $3.36 a share, steeply (an understatement) down from a profit of $639 million in the fourth quarter of 2014. That loss, however, was in line with Wall Street expectations. In the fourth quarter lower prices for natural gas led the company to write down the value of its reserves by $2.83 billion. For all of 2015 write downs came to $18.2 billion. (These write downs are a paper rather than a cash loss–although still important since they can affect the company’s leases on its reserves. If natural gas prices ever rise, sustainably, Chesapeake will write up the value of these assets again.)

The company still has a long way to go to to return to profitability and that will require a big swing in natural gas prices. (Chesapeake produces more natural gas in the United States than anybody but ExxonMobil (XOM). Chesapeake has hedged some of its gas production at $2.84 per thousand cubic feet and some of its oil production at $47.79 a barrel for 2016.) But the debt reductions announced today increase the odds that Chesapeake can survive until prices turn–which is why I own it in my Jubak Picks 50 portfolio as a long-term option on natural gas prices. Earlier in February Standard & Poor’s had called Chesapeake’s debt burden unsustainable. Well, it’s significantly more sustainable after today’s news.