[Editor's note: This story was updated at 8:13 a.m. CST Jan. 9.]

Chesapeake Energy Corp. (NYSE: CHK) beat analyst forecasts with initial estimates of fourth-quarter output on Jan. 9 as its efforts to focus on oil and move away from gas continued to pay off, sending its shares up 6%.

The Oklahoma-based oil producer said it expected total production to have been between 462,000 and 464,000 barrels of oil equivalent per day (boe/d) in the three months to Dec. 31. Analysts on average were expecting the company to produce 447,070 boe/d, according to Refinitiv data.

Chesapeake has been selling off assets to bring down its debt load and compete better in an industry that is striving to increase production on minimal spending. The company said Jan. 9 it would cut its rig count by 20% to lower capex spending next year.

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The company has been shifting to oil from natural gas to benefit from improved crude prices. It said growth in output in the Powder River Basin and Eagle Ford Shale has made up for its sale last year of natural gas holdings in the Utica Shale in Ohio.

"The divested daily oil volumes associated with the Utica sale, which represented 10% of our third quarter oil production, were replaced in the last two months of the year," CEO Doug Lawler said in a statement.

Chesapeake projected oil production in the quarter in a range of 86,000 to 87,000 barrels per day (bbl/d), also topping analysts' average estimate of 85,030 bbl/d.

Crude oil prices fell more than 35% in the three months ended Dec. 31 on concerns of oversupply and slowing global demand, but are still significantly up from 2016 lows.

On Jan. 9, Chesapeake said it had locked in prices for 16 million barrels of its 2019 oil production forecast of $58.61 per barrel.

Brent crude futures were trading at $59.73 a barrel at 7:03 a.m. CST (13:03 GMT), while U.S. futures were at $50.81 a barrel.

"We have secured a strong hedge position for gas and oil which provides stability and certainty in our cash generating capability," Lawler said.

Lawler did not give details of how much Chesapeake planned to spend on capital expenditures in 2019.

The company also said its principal amount of debt had come down to $8.167 billion, compared with $9.981 billion as of Dec. 31, 2017.

Shares of the company were trading 6.5% up at $2.61