Chesapeake Energy, once a power in natural gas, files for bankruptcy

  • Chesapeake Energy, once a power in natural gas, files for bankruptcy

Chesapeake Energy, once a power in natural gas, files for bankruptcy

A separate court filing indicated that Chesapeake has more than $10 billion in liabilities and assets, respectively.

Kirkland & Ellis LLP is serving as legal counsel, Alvarez & Marsal is serving as restructuring advisor, Rothschild & Co and Intrepid Financial Partners are serving as financial advisors, and Reevemark is serving as communications advisor to the Company.

Chesapeake revealed that it has secured commitments for $925 million in debtor-in-possession financing, which it says will be available upon court approval. The company would continue operating as normal during insolvency, CEO Doug Lawler told employees at the time. In the Powder River Basin, Crestwood’s midstream assets are supported by a 358,000 acreage dedication by Chesapeake and a 30,000 acreage dedication by Panther Energy, as well as dedications by other producers in the basin.

USA shale oil pioneer Chesapeake Energy filed for bankruptcy protection on Sunday, bowing to pressure from heavy debt and rock-bottom energy demand levels during COVID-19.

Chesapeake stands out because it grew so fast in its early years and because of its spectacular decline.

If its proposal ultimately is approved, Chesapeake would emerge from the process with a $2.5 billion line of credit, supplied through a $750 million term loan and $1.75 billion of new credit.

The Chapter 11 paperwork was filed with the U.S. Bankruptcy Court in the Southern District of Texas.

Chesapeake was operating 15 rigs on average in the fourth quarter past year before the coronavirus pandemic sapped fuel demand and roiled the energy markets. A lot of them were forced out by a combination of high debt and low oil prices.

Chesapeake Energy Corporation (the "Company") today was notified by the New York Stock Exchange ("NYSE") of its determination to commence proceedings to delist the Company's common stock and to suspend trading of the Company's common stock due to the Company's decision to voluntarily file for reorganization under Chapter 11 of the Bankruptcy Code. Founded in 1989, it became the world's second-largest natural gas producer in the 2000s, as hydraulic fracturing and horizontal drilling uncovered huge reserves of oil across USA states.

Last November, Lawler said the company would be able to improve its financial position despite issuing notice to investors that its debt load was about to surpass the terms of its credit facility. "For the US shale sector, there was been no bigger disruptor than Chesapeake", said Robert Clarke, the vice president of US Lower 48 Upstream for global consultancy Wood Mackenzie.

Over more than two decades, McClendon built Chesapeake from a small wildcatter to a top USA producer of natural gas.

But McClendon was forced to resign in 2013 over allegations of conspiring to rig bidding for oil and gas contracts over several years, and amid investor concerns over his heavy spending in what was already a hugely indebted sector. Mr McClendon was ousted in 2013 and died in an auto accident three years later. Lawler was eligible for $15.4 million in total compensation in 2019, although his payout shrank to $9.7 million because the company's share price dropped.