Oklahoma Shale pioneer Chesapeake Energy Corp. files for bankruptcy



by   |  VIEW 613

Oklahoma Shale pioneer Chesapeake Energy Corp. files for bankruptcy

Chesapeake Energy Corp., the Oklahoma City-based US Shale pioneer that with dynamism had helped the United States ramp up its fossil-fuel output, had filed for a Chapter 11 bankruptcy protection on Sunday, becoming the largest US Shale producer that botched to bear the brunt of an inflating debt-pile in context of a multi-year low oil and gas futures’ prices amid a sweeping slump in demands.

In factuality, the bankruptcy filing had marked up the end of an era for the 31-year-old US shale pioneer that the late wildcatter Aubrey McClendon had made the world’s biggest natgas producer back in the 2013s before having been forced to resign following a governance crises and stakeholders’ concerns over McClendon’s heavy expenses.

Shortly after the Oklahoma City-based Shale pioneer’s management board had blocked out its founder, the current Chief Executive Doug Lawler had taken charge of a company which had roughly $13 billion in debts at that time, however, over the past seven years, Lawler had managed to keep the US oil and natgas giant operational through a number of asset sales alongside cost-trimming measures, but the ongoing rout in crude oil prices that saw a nosedive below zero for the first time on record on mid-March had left Chesapeake nearly barefooted and out of options but seeking protection from its shareholders.

A necessary overhaul for long-term success, says Chesapeake’s Lawler

Late on Friday, following months of negotiations with its creditors and stakeholders, Chesapeake had filed for a Chapter 11 bankruptcy protection in an Oklahoma district court, while reflecting on the flipside of the coin, Lawler said in a statement during announcing the filing, “Despite having removed over $20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business.

” Concomitantly, Chesapeake Corp., which has more than $10 billion in debts to date, said in the security filings late on Sunday that the overhaul would aid Chesapeake to eradicate nearly $7 billion of its debts, while the company had also received $925 million debtor-in-possession from its lenders on revolving credit facilities, a particular type of customizable credit, to see through the periods of the bankruptcy proceedings.

Aside from that, the Oklahoma City-based US Shale pioneer had also agreed to a $2.5 billion exit financing deal, while some of its creditors alongside secured stakeholders had reached an accord with the company to offer $600 million worth of shares upon exiting the Chapter 11 bankruptcy.