Chesapeake Energy Craters 40% on Restructuring Report

http://www.bloomberg.com/news/articles/2016-02-08/chesapeake-energy...

 
Joe Carroll jcarrollchgo
February 8, 2016 — 9:22 AM ESTUpdated on February 8, 2016 — 10:00 AM EST
  • Shares plunge to $1.83, the lowest since January 2000
  • Firm hired Kirkland & Ellis for restructuring, Debtwire says

The shares dropped 40 percent to $1.83 at 9:45 a.m. in New York, the lowest intraday level since January 2000. Before today, the Oklahoma City-based company had already lost 85 percent of its market value during the previous year. Chesapeake’s bonds also plunged. The fall was triggered by a Debtwire report that Chesapeake retained Kirkland & Ellis to help restructure a $9.8 billion debt load.

Chesapeake will post a second consecutive annual loss this year as an oversupply of North American gas weighs on prices and erodes cash flows the company needs to pay its debts, according to forecasts compiled by Bloomberg. Chesapeake is scheduled to disclose fourth-quarter and full-year 2015 results on Feb. 24.

A voice mail and e-mail left with the company’s media relations office weren’t immediately returned.

Bonds Plunge

The company’s bonds led losses among high-yield debt on Monday. Chesapeake’s notes due March 2016 tumbled by a record to 74.5 cents, from 95 cents last week, while its bonds maturing in 2017 fell to an all-time low at 34 cents.

Standard & Poor’s last month cut Chesapeake’s credit-rating to "CCC+" with a negative outlook on assumptions that oil and gas prices will remain weak. The company’s debt leverage is unsustainable, S&P said.

Chesapeake has $9.8 billion outstanding debt, of which $1.3 billion will be due before the end of next year, according to data compiled by Bloomberg.

The company was the worst performer on the Standard & Poor’s 500 Index on Monday.


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Permalink Reply by Philip Brutz on February 8, 2016 at 5:05am

Chesapeake Energy Corporation (CHK)

10:56 am Chesapeake Energy trading halted

 -NYSE 
1.50 Down 1.56(50.98%) 10:53AM EST - NYSE Real Time Price
Prev Close: 3.06
Open: 2.55
Bid: 1.60 x 1100
Ask: 1.61 x 7700
1y Target Est: 4.37
Beta: 1.17296
Next Earnings Date: 24-Feb-16CHK Earnings announcement
Day's Range: 1.50 - 2.59
52wk Range: 1.50 - 21.29
Volume: 50,421,666
Avg Vol (3m): 24,818,800
Market Cap: 995.25M
P/E (ttm): N/A
EPS (ttm): -33.88
Div & Yield: N/A (N/A)
Permalink Reply by Paul Butler on February 8, 2016 at 6:13am

Every dog has his day.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on February 8, 2016 at 11:11am

Every quarter Chesapeake brags about reducing Production Costs, and every quarter our Buck Well 1H Royalties drop.

What is the possibility that Chesapeake is doing across the board cuts in royalty pay out and calling this a reduction in Production Costs?

Everyone being paid royalties by Chesapeake knows the answer to this question. I believe the possibility is very close to 100% that we are being shorted royalties to save the company.

Not to mention Ohio's NGL royalty being very close to 0% for the full 5 years that NGLs have been leaving the state. I wasn't going to mention that but it slipped out. Who's running Ohio anyway? 

Everyone is at sleep at the wheel. I thought you were driving, no you were driving, oh it was supposed to be the governor but he is out of state.

Permalink Reply by james david lamm on February 8, 2016 at 1:10pm

ron, not too thrilled about our governor but I don't think he hates the fossil fuel industry like our president that wants to put on a $10.00 tax to fund things that do not work like green energy. I do not have electric farm machinery or want to pay twice the current price for power. good luck.

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