• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days If hydrogen is the answer, you're asking the wrong question
  • 9 hours How Far Have We Really Gotten With Alternative Energy
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Chesapeake May Go Bankrupt This Week

Chesapeake

Chesapeake Energy could file for Chapter 11 bankruptcy protection later this week, according to unnamed sources who spoke to Reuters.

A separate report by MarketWatch also cited an unnamed source as saying that this week was the week for Chesapeake to throw in the towel.

According to Reuters’ sources, the shale major was currently negotiating a loan that it would get on a debtor-in-possession basis to stay afloat during Chapter 11 procedures. The loan would reportedly be worth $900 million. Chesapeake was also in talks to add some of its current debt to this loan, which, if agreed, would push the debtor-in-possession facility to $2 billion. The company’s total existing debt is over $9 billion.

The MarketWatch sources said the bankruptcy decision was made after this week Chesapeake missed a bond payment of $10 million due Monday. The missed deadline was the beginning a grace period for negotiations with bondholders, but the company has decided to file for Chapter 11 protection instead, in the coming weeks or even days, the sources told MarketWatch.

If the bankruptcy filing materializes, it would make Chesapeake the largest shale player to date to go under in the current crisis. But this is not the first time the company has had dramatic troubles. During the last crisis, between 2014 and 2016, Chesapeake risked bankruptcy, but managed to avoid court proceedings through a series of out-of-court debt exchanges, according to MarketWatch.

This time things are different, and debt exchanges may not be enough to save the company. Chesapeake reported a net loss of $8 billion for the first quarter, up from a net loss of $21 million a year earlier. Its stock and bond prices were pummeled to the ground by the oil price war and the pandemic like the stocks and bonds of so many others but, as many warned, those with the largest debt burdens would be the first to go.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News