Tuesday, March 17, 2020

Natural Gas: "Exclusive: Shale gas pioneer Chesapeake Energy taps restructuring advisers - sources" (CHK)

Dead man walking.
Reuters had the scoopage yesterday afternoon:
Chesapeake Energy Corp, the oil and gas exploration and production company that helped spearhead the U.S. shale revolution, has tapped debt restructuring advisers amid a rout in energy prices, people familiar with the matter said on Monday. 

The Oklahoma City-based company, which was co-founded by late wildcatter Aubrey McClendon, was struggling with its debt pile of roughly $9 billion even before an oil price war between Saudi Arabia and Russia and the fallout from the coronavirus pandemic contributed to driving its shares down more than 50% in the last three weeks.

Chesapeake has enlisted restructuring lawyers at Kirkland & Ellis LLP and investment bankers at Rothschild & Co who specialize in reworking debt, the four sources said. The company is studying its options and no debt restructuring move is imminent, the sources added, asking not to be identified because the deliberations are confidential....

As noted in the intro to March 8's  "Assume Crash Positions: Goldman Cuts Brent Price Target To $30 'With Possible Dips Near $20'":
U.S. #3 Natural Gas Producer, Chesapeake Crushed, Down 32% (CHK)
“Gasmaggedon” Sweeps Over Global Gas Market
EIA Natural Gas Storage Report February 6, 2020 Meh
The bulls are running out of winter and unless the producers can find buyers in Europe for LNG, Henry Hub could see $1.70 before spring.
And another cool spring akin to 2019 and you could see a half-dozen major bankruptcies among the E&P folks (looking at you EQT, CHK)

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