A Texas natural Gas Rig in Eagle Ford Shale
A Texas natural Gas Rig in Eagle Ford Shale Reuters

With the price of natural gas at its lowest point in two years, natural gas-producing companies are trying to raise enough capital to keep afloat, and the second-largest among them is no exception.

Chesapeake Energy (NYSE: CHK) this week announced that it raised $2.6 billion by selling off shares in a newly formed subsidiary, parts of its production volume and 58,400 acres of leases in Oklahoma, to an Exxon Mobil subsidiary.

Aubrey K. McClendon, Chesapeake's Chief Executive Officer, said he was pleased with the asset sale, and he hinted more could be on the way.

We plan to monetize other non-strategic assets during 2012, including our assets in the East Texas Woodbine play where we own approximately 50,000 net acres of leasehold, McClendon said on Monday.

Chesapeake's move this week comes as some natural gas companies in the past several months announced they were scaling their natural gas production back in light of depressed prices.

Chesapeake Energy's recent announcement comes as the company previously said it was going to curtail the number of wells it drilled, including the amount of natural gas produced this year. In January 2012, the company said it was going to operate 24 rigs, reducing the number of wells by 50 from a year earlier. The reduction will include a drop in 1 billion cubic feet of natural gas a day.

ConocoPhillips (NYSE:COP) joined in with Chesapeake, and by February, BG Group, a British oil and natural gas company, announced a similar move.

Calling itself 'America's Champion of Natural Gas,' Chesapeake has been aggressive in its purchasing of new natural gas leases. In all, it has roughly 2.5 million acres in natural gas shale leases, but its spending, analysts say, has outpaced its returns anywhere between $6 billion and $9 billion.

As the country experiencing a boom in natural gas drilling, thanks to advances in drilling technology, price has dropped to the point that natural gas on the New York Mercantile Exchange fell Tuesday to $2.04 per 1,000 cubic feet, hitting a new low since 2010. The price of natural gas has not risen above $3 per 1,000 cubic feet since Jan. 11, 2012.

And the price is likely to keep dropping if production levels don't fall drastically, reported the Washington Post on Sunday, with analysts expecting the price of natural gas to fall below $1.

With 2.5 trillion cubic feet of natural gas produced and in storage, the country is almost at its storage capacity of 4.4 trillion cubic feet. There could be no more room for additional natural gas by next fall if summer production levels stay the same, the Post reported.

The money raised by Chesapeake's asset sale will be used to help close the company's funding gap and help finance its drilling projects, Reuters reported.

In Tuesday trading Chesapeake was down 76 cents to $20.71 a share.