Fracking Pioneer Chesapeake Energy Cleared to Exit Bankruptcy, The Oklahoma City-based oil-and-gas producer is authorized for a restructuring that cuts about $7 billion in debt and includes a $600 million equity offering by Jonathan Randles, Jan. 13, 2021, Wall Street Journal
A judge authorized Chesapeake Energy Corp. to exit bankruptcy and cut $7 billion in debt through a financial restructuring that transfers control of the company to investment firms that own the oil-and-gas producer’s high-ranking debt.
Judge David Jones of the U.S. Bankruptcy Court in Houston said Wednesday he would confirm the fracking pioneer’s chapter 11 plan, ruling against a more junior creditor group that argued during a nearly month long trial that they would be shortchanged in the restructuring.
… After approving the company’s plan during a virtual court hearing, Judge Jones addressed Chesapeake Chief Executive Robert Lawler directly, telling him “to remember that a lot of people have suffered a lot of pain for Chesapeake to have a second chance and I ask that you not forget that going forward. I expect he already has.
“Chesapeake is a really big and important company. It’s an important company to our country’s infrastructure, it helps make everything work,” Judge Jones said. “But we live right now in a very, very difficult time and you have the ability to be a leader and to make a difference.” …
Chesapeake Energy bankruptcy plan approved by U.S. judge by Gary McWilliams, Jan 14, 2021, Reuters in Financial Post
HOUSTON — U.S. oil and gas producer Chesapeake Energy’s Chapter 11 bankruptcy plan was approved by a U.S. judge on Wednesday, giving lenders control of the shale firm and ending a contentious trial.
The plan provides about $3 billion in financing and eliminates $7 billion in outstanding debt. Investors who committed last spring to back the restructuring stand to benefit enormously given the company’s about $5.13 billion enterprise value and improved oil and gas prices since the deal was struck.
Once the second-largest U.S. natural gas producer, Chesapeake filed for court protection last June, weighed down by heavy debt….
Unsecured creditors had opposed the plan, arguing Chesapeake was bankrupt long before it sought court protection and criticizing its terms for giving a group of debt holders, including mutual fund giant Franklin Advisers Inc., an advantage.
However, Chesapeake managers “should not be criticized,” said U.S. bankruptcy court Judge David Jones rejecting efforts to unsecured creditors to revise or delay his decision, “they should be complimented.”
He rejected a last minute offer by an investment group led by Jefferies Financial Group to finance the company even as he concede his decision to allocate a significant number of share-rights to Franklin and others provided them with a big payday.
“I might have made a different decision with the benefit of hindsight,” Jones said. “The fact of the matter is I didn’t.”
A bankruptcy milestone: Chesapeake plan approved by Jack Money, Jan 13, 2021, Oklahoman
A federal bankruptcy judge in Texas approved Chesapeake Energy’s reorganization plan late Wednesday, clearing the way for the company to operate without court oversight soon. A tragic day for water, humanity, the environment and investors.
The ruling by Judge David R. Jones will enable the Oklahoma City-based operator to formally emerge from a process it started in late June within about 30 days.
When it filed its case, Chesapeake owed creditors $8.9 billion, and the plan approved by Jones on Wednesday sheds $7 billion of that debt.
The company will also exit bankruptcy with $600 million raised through a backstopped equity rights offer and with $2.5 billion in exit financing to fund its ongoing operations.
“We initiated our restructuring process to fundamentally reset our company and emerge a stronger and more competitive enterprise, and with today’s confirmation of our plan, we are well on our way to achieving that objective,” Chesapeake spokesman Gordon Pennoyer said Wednesday evening. “We greatly appreciate the court’s thorough consideration of our case and look forward to concluding this process as expeditiously as possible.”
There were no hard details late Wednesday about what a new Chesapeake will look like from an operating standpoint when it steps back into normal operations.
However, in a filing with regulators it made earlier this year, Chesapeake stated it planned to continue operating in the Marcellus Shale field of the Appalachia Basin, the Eagle Ford Shale in the Rio Grande and Brazos River fields of Texas, the Haynesville Shale field in Louisiana and within the Powder River Basin in Wyoming.
Its Mid-Continent operations were sold in November as part of the bankruptcy process to Oklahoma City-based Tapstone Energy for $130.5 million. Tapstone is led by former Chesapeake Energy Corp. executive Steve Dixon.
As part of the bankruptcy case, Chesapeake previously projected its general and administrative and operating expenses over a five-year period that covers 2021 through 2025, aiming to hold administrative expenses at $187 million annual and cutting operating expenses from about $1.3 billion this year to just more than $1 billion in 2025.
Part of those calculations involve projected realized pricing the company expects to receive for West Texas Intermediate oil and Henry Hub natural gas it produces. The company expected it would get between $40 and $45 a barrel for oil over the five years and at least $2.25 per million British thermal units of natural gas.
The company stated then that it planned to drop hedging strategies for both in 2023.
Chesapeake projected it would earn total revenues of about $3 billion in 2021, about $2.5 billion in 2022, about $2.3 billion in 2023 and about $2.25 billion in 2024 and in 2025.
It also projected it would generate free cash flows of $725 million in 2021, $364 million in 2022, $274 million in 2023, $251 million in 2024 and $260 million in 2025.
The company stated it had identified $2.5 billion in potential savings opportunities over the next decade, and noted that $1.75 billion of that was locked in to its post-bankruptcy plans.
The filing was required by an agreement it signed with certain holders of its funded debt, it stated.
Shale gas pioneer Chesapeake Energy worth $5.13 billion on bankruptcy exit -U.S. judge by By Reuters Staff, Jan 11, 2021
Chesapeake Energy Corp’s value has soared since its June bankruptcy filing, the U.S. judge overseeing the natural gas producer’s trial indicated, and is worth $5.13 billion, far above the shale gas pioneer’s estimate.
Creditors have offered sharply different estimates of the firm’s enterprise value during its trial in U.S. bankruptcy court in Houston. Judge David Jones’s figure was $1 billion higher than the mid-point of the range recently offered by the Oklahoma company.
Wow, just wow.
2020 06 29: DEP data shows bankrupt Chesapeake drilling new wells; Did Chesapeake file for bankruptcy to avoid paying outstanding royalties owed and avoid paying fines for criminal charges possibly up AG Josh Shapiro’s courageous sleeves? The company’s timing is suspect.
Yet another frac’er bites sweet dust: Weatherford facing more than $10Billion in debt files for bankruptcy protection. US court order accepts restructuring plan, which includes Weatherford getting $2.2Billion in magic money; Stockholders to receive proportionate shares of the company’s **new stock** while operations continue as “normal.”
Texas, Burleson County: Chesapeake Energy Corp Contractor killed,three people severely burned after oil rig explosion. Will there ever be mercy for oil and gas industry workers and their families? For the killed, burned, blown up, steamed to death, fumed to death, dying tortuously by exposure to toxic secret chemicals and or radioactivity, suffering hideous cancers?
OOOPS! Fracking Study on Water Contamination Under Ethics Review, Chesapeake Energy paid undisclosed fees to lead author, study based on questionably collected samples (ensure no methane?) provided by Chesapeake
May 2014: Encana and Chesapeake Criminal Anti-trust Hearing in Michigan: Encana pleads “no contest” and buys its way out on the first day with $5 Million Settlement Meanwhile Internal investigation by Encana clears Encana of collusion allegations with Chesapeake
Attorney General Bill Schuette: Encana and Chesapeake Energy criminally charged with colluding to keep oil and gas lease prices artificially low in Michigan; Also face separate, federal antitrust investigation by Department of Justice
Another proven “documented” case! American Arbitration Association, Commercial Arbitration Tribunal, orders Chesapeake to pay Jacqueline Place of Terry Township, Bradford County PA, $60,000 for methane contamination in water well after hydraulic fracturing
Chesapeake pays $75,000 fine for problems that led to Oklahoma well blowout, The January blowout near Sweetwater in western Oklahoma happened after a drilling rig hit an unexpected, shallow pocket of gas. A later investigation found casing in a nearby Chesapeake well had failed and caused the gas to migrate
… McClendon admitted on the company’s February earnings call that $5.00 per million BTU pricing on the New York Mercantile Exchange (NYMEX) equates to $3.50 gas at the wellhead, once differentials like gathering and compression costs are included in the cost calculus.
“Even $3.50 gas at the wellhead does not create enough cash flow in the industry to maintain today’s drilling price — even for the best-managed shale plays,” he said. …