• 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
  • 6 days Does Toyota Know Something That We Don’t?
  • 5 days World could get rid of Putin and Russia but nobody is bold enough
  • 1 day America should go after China but it should be done in a wise way.
  • 7 days China is using Chinese Names of Cities on their Border with Russia.
  • 9 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 9 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 9 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 7 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 8 days Putin and Xi Bet on the Global South
  • 8 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 9 days United States LNG Exports Reach Third Place
  • 9 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Plunging Natural Gas Prices Is Bad News for Drillers

Plunging Natural Gas Prices Is Bad News for Drillers

The once red-hot labor market…

U.S. Oil Drilling Sees 6-Rig Gain

U.S. Oil Drilling Sees 6-Rig Gain

The total number of active…

Shale Giant On The Brink Of Bankruptcy Receives Federal Lifeline

The federal government has allowed bankrupt shale major Chesapeake Energy to stop drilling at more than 100 leases on federal lands without losing ownership of the assets, Reuters has reported, citing data that shows the approvals have been granted since the start of the coronavirus crisis.

The company, according to the data, first applied for permission to suspend drilling across these leases in late April. By mid-May, the Bureau of Land Management had granted it 108 approvals, Reuters reports. The BLM has been granting permission to oil companies to suspend drilling in federal leases without losing their ownership on a case-by-case basis.

However, the suspensions are not indefinite. Most of them expire at the end of this month, Reuters noted. While the BLM could grant an extension, it is unclear whether it can grant one to a company that is effectively bankrupt.

Last week, media reported, citing unnamed sources, that Chesapeake was preparing to file for Chapter 11 bankruptcy protection after it missed a bond payment due Monday, June 15. 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.

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.

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 pummelled 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 Irina Slav for Oilprice.com

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