Singapore — US oil and gas producer Chesapeake Energy has filed for Chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas to facilitate a comprehensive balance sheet restructuring, the company said in a statement June 28.
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Register NowChesapeake, which is one of the larger producers to have succumbed to the oil price crash, last month took a $8.5 billion impairment charge against the value of all its oil assets and had warned that the company may not continue as a going concern.
S&P Global Platts Analytics said in a report on May 15 that the company was considering filing for bankruptcy to help restructure over $9 billion of its debt after low oil prices had caused its untapped oil and gas reserves to decline in value, making it hard to borrow against those assets.
Chesapeake has entered into a restructuring support agreement with 100% of the lenders under its revolving credit facility, the company said in the statement, adding that pursuant to this, Chesapeake will implement a Chapter 11 plan of reorganization to eliminate about $7 billion of debt.
"We are fundamentally resetting Chesapeake's capital structure and business to address our legacy financial weaknesses and capitalize on our substantial operational strengths," Chesapeake President and CEO Doug Lawler said in the statement.
"By eliminating approximately $7 billion of debt and addressing the legacy contractual obligations that have hindered our performance, we are positioning Chesapeake to capitalize on our diverse operating platform and proven track record of improving capital and operating efficiencies and technical excellence," he said.
For the first quarter of 2020, Chesapeake posted a net loss of $8.3 billion, or $852.97/share, on a GAAP basis, compared to a $44 million, or $6.37/share, net loss a year ago, Platts reported earlier.
Chesapeake's portfolio includes unconventional oil and natural gas assets in US onshore plays. The company produced 477,000 b/d of oil equivalent, it said in its Q4 2019 earnings report released in February.
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June 29, 2020 at 01:57PM
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US oil, gas producer Chesapeake Energy files for bankruptcy protection - S&P Global
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