Chesapeake Energy Corp is seeking as much as $12 billion from assets sales and joint ventures to cope with a cash crunch amid rising debt and tumbling gas prices.

Chesapeake, the second-biggest U.S. natural-gas producer after Exxon Mobil Corp, has a strategy to increase output from more profitable wells that produce crude oil and natural gas that is rich in liquid content. The company expects to get $10 billion to $12 billion from transactions including the potential sale of all its oil and gas fields in the Permian Basin of Texas and New Mexico, Chesapeake said in a statement.

Chesapeake reported last month that it slashed its long-term debt by just over $2 billion over the past year and expected to meet its 25 percent two-year debt reduction goal by the end of this year, regardless of natural gas prices. It anticipates proceeds of about $2 billion during 2012 involving a portion of its midstream assets, service company assets and miscellaneous investments. Chesapeake said it will sell $1 billion of senior notes due in 2019 and use the proceeds to repay bank credit.

In the next two months, Chesapeake will receive an up-front payment for future production in the Texas Granite Wash formation. The company also plans to sell stakes in a new subsidiary that will hold assets in the Cleveland and Tonkawa deposits in Oklahoma.

Moody’s Investors Service cut its outlook for Chesapeake’s corporate rating to stable from positive, citing lower gas prices and rising debt. The new offering was rated Ba3, three levels below investment grade and a level lower than Chesapeake’s corporate credit.

Low prices for natural gas could make it difficult to get the prices it wants for the assets. In addition, the company's cash flow is under pressure due to low prices for natural gas.

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