Chesapeake Energy Corp. exited Chapter 11 bankruptcy with a business plan focused on natural gas after recently pursuing crude oil production. The company filed for court protection in June 2020 and its plan to shed about $7.8 billion in debt was approved in January.
As part of the restructuring plan, Chesapeake president and CEO Doug Lawler said the company would focus on environmental responsibility and reducing greenhouse gas (GHG) emissions.
“Today marks a new day for Chesapeake,” Lawler said in a Feb. 9 statement. “We have fundamentally reset our business, and with an improved capital and cost structure, disciplined approach to capital reinvestment, diverse asset base and talented employees, we are poised to deliver sustainable free cash flow for years to come. Additionally, our unwavering resolve to leading a responsible energy future has never been greater, and our pledge to achieve net zero GHG direct emissions by 2035, eliminate routine flaring on new completions immediately, and significantly reduce our methane and GHG emission intensity by 2025, place Chesapeake on a path toward setting a new standard of environmental excellence in our industry.”
Under the court-approved plan, approximately $7.8 billion of debt has been equitized, and the company’s preferred and common equity interests have been canceled as of Feb. 9. The company’s new common shares will be listed on the NASDAQ Exchange under the ticker symbol “CHK” and are expected to commence trading on Feb. 10.
The company has also laid off 220 employees, or about 15 percent of its workforce, most from its Oklahoma City location.
In accordance with the plan, a new board of directors was appointed and includes chairman Michael Wichterich, Timothy S. Duncan, Benjamin C. Duster IV, Sarah Emerson, Matthew M. Gallagher, Brian Steck and Lawler. The board is establishing the company’s first Environmental and Social Governance Committee dedicated to ESG oversight and excellence. Biographies for the new board members can be found on the company’s website at http://www.chk.com/about/board-of-directors.
“The new board of directors and I look forward to working with Doug and the entire Chesapeake team to build an enduring enterprise which creates sustainable value for our stakeholders by efficiently producing low-cost energy under the strictest environmental, social, and governance standards,” said Wichterich.
As of Feb. 9, Chesapeake’s principal amount of debt outstanding was approximately $1.27 billion, compared to $9.09 billion as of June 30, 2020.
Chesapeake’s average daily production for the 2020 fourth quarter was approximately 435,000 barrels of oil equivalent (boe), and it projects its full year 2021 average daily production to be approximately 427,000 boe. The company’s planned capital expenditures for 2021 includes operating an average of six rigs and two stimulation crews with an estimated spend of approximately $700 million. Additional information about our strategy and 2021 outlook may be found on the company’s website at http://investors.chk.com/presentations.
Details of the restructuring, the securities issued pursuant to the plan, and the debt and other agreements entered into as part of the Plan will be provided in a Form 8-K, which can be viewed on the company’s website or the Securities and Exchange Commission’s website at www.sec.gov. Court filings and other information related to the restructuring will continue to be available on the company’s website at www.chk.com/investors, and the full court docket for the company’s restructuring proceedings can be found at https://dm.epiq11.com/case/chesapeake/dockets.