Chesapeake Energy Corp. (NYSE: CHK) said it expects production to keep rising this year, despite a 12% cut in spending, sending the U.S. natural gas producer's shares up nearly 23% on Feb. 22.

Like its peers in the energy industry, Chesapeake faces pressure from investors to increase production on minimal spending, and has cut costs and jobs to manage a balance sheet saddled with nearly $10 billion in debt.

The company, which is selling assets worth $2 billion to $3 billion, said it expects production to rise by about 3% in 2018 after adjusting for asset sales.

While that growth rate is the same as last year, it will come off a planned capital budget of $1.96 billion to $2.38 billion for 2018, which at the mid-point is 12% lower than last year.

The Street should "perceive this as a positive given 2018 spending is decreasing, while production still increasing," SunTrust Robinson analyst Neal Dingmann said.

Since crude oil prices crashed in 2014, U.S. energy producers have been curbing costs, while aiming to boost output through new technology such as processing seismic data better, improving reservoir models and drilling more efficient wells.

Chesapeake said it expects new wells to be "a lot more economic" as it tests new well designs.

"We will continue to drive costs out of our operations, improve margins and utilize advancing technologies to create value across our portfolio," CEO Doug Lawler said on a conference call.

Chesapeake is focusing on the Powder River Basin across Montana and Wyoming to tap gas reserves. It also operates in the Eagle Ford Shale in Texas, Haynesville Shale in Louisiana, Utica Shale in Ohio and Anadarko Basin in Oklahoma.

RELATED: Chesapeake Energy Executive: 'Haynesville Hot Again'

Higher production and averaged realized prices, and a near 9% drop in costs, helped Chesapeake's fourth-quarter profit top analysts' expectations.

Chesapeake's net income was $309 million, compared with a year-ago loss of $740 million.

Its adjusted profit of 30 cents per share beat analysts estimates of 24 cents, according to Thomson Reuters I/B/E/S.

Chesapeake's average production rose 3.3% to 593,200 barrels of oil equivalent per day (boe/d). Average sales price rose 20.2% to $24.41 per boe.

The company's shares were up 22.2% at $3.22 in late morning trading, set for their biggest one-day percentage gain in nearly two years.