• 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
  • 1 day GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days The United States produced more crude oil than any nation, at any time.
  • 4 days How Far Have We Really Gotten With Alternative Energy
  • 3 days Bad news for e-cars keeps coming
  • 4 days China deletes leaked stats showing plunging birth rate for 2023
  • 6 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.

Chesapeake Shares Plunge 66% In Single Day

Shares of Oklahoma-based oil exploration company Chesapeake Energy (NYSE: CHK) fell more than 66% on Tuesday afternoon after Bloomberg reported after trading on Monday that the company was “preparing a potential bankruptcy filing”.

$CHK traded wildly early on Monday, jumping from near $40 per share to nearly $70. But trading was halted multiple times on Tuesday pending news, after the stock fell by half. The stock is now trading at $23 per share.

Chesapeake is sitting atop a mountain of debt of about $9 billion.

That thought that Chesapeake might go bankrupt is nothing new. Back in May, Chesapeake said it was evaluating Chapter 11, as well as some other options, because the low oil price environment was unsustainable given its heavy debt load. But Chesapeake was already ringing that bankruptcy bell back in November as well, saying that there was “substantial doubt” about the company’s “ability to continue as a going concern.”

Even before that, Chesapeake stock was eyed with disdain, and not for being merely a fracker and shale pioneer. Chesapeake founder Aubrey McLendon, after leaving the company some years earlier, was indicted in 2016 for allegedly conspiring to fix lease prices. One day after he was indicted, McLendon was killed in a one-car crash.

These are trying times for all oil and gas explorers, let alone ones that have considerable debt and more than a year of stock volatility even before the oil price crisis. Chesapeake wrote down its oil and gas assets by roughly $8.5 billion this year, and had just $82 million in cash at the end of the first quarter. That cash compares to some $192 million in bond payments that are due some time in August.

Although trading had been halted pending some earth-shattering news, no news has been forthcoming, even after trading had been resumed.

By Julianne Geiger for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:



Join the discussion | 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