Home / Business / Chesapeake Energy, Shale Pioneer, File for bankruptcy protection

Chesapeake Energy, Shale Pioneer, File for bankruptcy protection



HOUSTON – Chesapeake Energy, a pioneer in the extraction of natural gas from rock shale across the country, presented bankruptcy protection on Sunday, unable to overcome a mountain of debt that has become unsustainable after a decade of stubbornly low gas prices.

The company helped convert the United States from a natural gas importer into a major exporter under the reckless leadership of Aubrey McClendon, the company’s co-founder and former CEO.

But McClendon overestimated the company and accumulated over $ 20 billion in debt before being forced to withdraw in 201

3, and Oklahoma City-based Chesapeake never fully recovered.

Chesapeake lost $ 8.3 billion in the first quarter of this year and had only $ 82 million in cash in late March. With $ 9.5 billion in debt at the end of last year, he has a $ 192 million bond payment due in August.

In a statement, Chesapeake said he was filing for Chapter 11 protection to facilitate a complete restructuring. As part of its deal with the lenders, the company said it had secured $ 925 million in financing with a revolving credit facility, and eliminated approximately $ 7 billion in debt. It also secured a future commitment of $ 600 million in new shares.

“We are basically restoring Chesapeake’s capital structure and business to address our legacy financial weaknesses,” said Doug Lawler, Chesapeake president and chief executive officer. “Chesapeake will be uniquely positioned to emerge from the Chapter 11 process as a stronger and more competitive venture.”

Chesapeake has 1,900 employees.

It is the last heavily indebted oil and gas activities to seek protection from bankruptcy as the coronavirus pandemic has paralyzed energy demand.

Under its former CEO Mr. McClendon, the company has punched Texas, Oklahoma, Ohio, Wyoming and Louisiana. McClendon was bold as he aggressively beat competitors on land leases and explored extensively in the early 2000s, although he also drilled many wells that disappointed investors. By 2011, he and others who followed in his footsteps had produced an excess of natural gas that brought Chesapeake and other companies to the brink of collapse.

To find use for all that natural gas, McClendon has embarked on a campaign to promote compressed natural gas vehicles, but the effort has gone nowhere. He sought to forge alliances with environmentalists, arguing that gas could replace coal and be a bridge to a cleaner energy future.

Before him In 2013, McClendon built a luxurious campus for the company in Oklahoma City, complete with a community garden, luxury dining facilities and two parking garages that alone cost $ 100 million.

He acquired trophy assets such as the Oklahoma City Thunder basketball team, interests in a French winery and a $ 12 million antique map collection. The basketball team still plays in the Chesapeake Energy Arena, which was a symbol of Oklahoma City’s awakening as a gas hub.

From 2010 to 2013, the company spent approximately $ 30 billion more on leasing and drilling than production.

McClendon was also known for cutting corners, which put him and his company in trouble. Chesapeake executives complained about the lack of a formal budget process or employee performance management system. The company borrowed money to finance charity and real estate projects.

  • Updated on June 24, 2020

    • Is it more difficult to exercise while wearing a mask?

      A comment published this month on the website of the British Journal of Sports Medicine points out that covering one’s face during exercise “comes with problems of potential respiratory restriction and discomfort” and requires “benefits of balancing against possible adverse events”. Masks alter exercise, says Cedric X. Bryant, president and scientific director of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people may also experience dizziness during family workouts while they are disguised, says Len Kravitz, professor of motor sciences at the University of New Mexico.

    • I have heard of a treatment called dexamethasone. It works?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in seriously ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced the deaths of patients undergoing ventilation by one third and the deaths of patients with oxygen.

    • What is paid leave for a pandemic?

      The coronavirus emergency aid package gives many American workers a paid leave if they need to take time off because of the virus. It gives skilled workers two weeks of paid sick leave if they are sick, quarantined or seeking diagnosis or preventive treatment for coronavirus or if they care for sick family members. It gives 12 weeks of paid leave to people who care for children whose schools are closed or whose childcare provider is unavailable due to coronavirus. It is the first time that the United States has received extensive federal paid leave and includes people who generally do not get such benefits, such as part-time workers and those working in concert economics. But the measure excludes at least half of workers in the private sector, including those of the country’s largest employers, and offers small employers significant leeway to deny holidays.

    • Does Covid-19 asymptomatic transmission occur?

      So far, the evidence seems to prove it. A widely cited document published in April suggests that people are more contagious about two days before the onset of coronavirus symptoms and estimated that 44% of new infections were the result of transmission by people who were not yet experiencing symptoms. . Recently, one of the top experts from the World Health Organization said that the transmission of coronavirus by people who did not exhibit symptoms was “very rare”, but later rejected this claim.

    • What is the risk of catching coronavirus from a surface?

      Touching contaminated objects and then getting infected with germs is generally not the way the virus spreads. But it can happen. Numerous studies on influenza, rhinovirus, coronavirus and other microbes have shown that respiratory diseases, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places such as day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus – whether it’s superficial transmission or close human contact – is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does the blood type affect the coronavirus?

      A study conducted by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the disease caused by the coronavirus. Having type A blood was linked to a 50% increase in the likelihood that a patient would need to receive oxygen or go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the United States?

      The unemployment rate dropped to 13.3 percent in May, the Department of Labor said on June 5, an unexpected improvement in the nation’s labor market as hires rebounded faster than economists expected. Economists had expected the unemployment rate to rise to 20 percent, after hitting 14.7 percent in April, which was the highest since the government started keeping official statistics after WWII. But the unemployment rate declined instead, with employers adding 2.5 million jobs after losing more than 20 million jobs in April.

    • What are the symptoms of coronavirus?

      The most common symptoms include fever, dry cough, fatigue and breathing difficulties or shortness of breath. Some of these symptoms overlap with those of the flu, making it difficult to detect, but a runny nose and closed breasts are less common. The C.D.C. he also added chills, muscle aches, sore throats, headaches and a new loss of sense of taste or smell as symptoms to consider. Most people get sick five to seven days after exposure, but symptoms can appear in just two days or up to 14 days.

    • How can I protect myself while I fly?

      If air travel is inevitable, there are a few steps you can take to protect yourself. More important: wash your hands often and stop touching your face. If possible, choose a place near the window. An Emory University study found that during the flu season, the safest place to sit on an airplane is near a window, as people sitting on the window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfectant wipes to clean the hard surfaces of your seat such as the head and armrest, the safety belt buckle, the remote control, the screen, the back pocket and the tray table. If the seat is hard and non-porous or in leather or leather, you can also clean it. (Using wipes on padded seats could lead to a wet seat and the spread of germs instead of killing them.)

    • What should I do if I feel bad?

      If you have been exposed to coronavirus or think you have, and have a fever or symptoms such as coughing or breathing difficulties, call a doctor. They should give you advice on whether to be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


McClendon was accused in 2016 of conspiring to suppress prices for oil and natural gas leases. The prosecution claimed to have orchestrated a conspiracy in which two oil and gas companies clashed over each other not to bid on several leases in northwestern Oklahoma between late 2007 and early of 2012.

The day after the indictment, Mr. McClendon, at the age of 56, died in an accident in Oklahoma City after his car hit a high-speed bridge. Upon hearing of McClendon’s death, oil magnate T. Boone Pickens, who passed away in 2019, said: “No individual is without flaws, but its impact on American energy will last long.”

When Mr. Lawler, an executive veteran of Anadarko, took over the management of the company in 2013, he called his new job “the biggest challenge in the industry”.


Source link