Chesapeake – “We Aren’t Broke!”

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By Jacob Maslow

Chesapeake Energy (NYSE: CHK) yesterday spurred into action to reassure investors that it was not facing bankruptcy, as rumours abounded on the street that the second-biggest natural gas producer in the US is broke.

Chesapeake shares stopped trading after plunging over 50%, but later regained some of the losses as it reassured investors that its consulting with Kirkland & Ellis were simply to help it improve its balance sheet, and not to look at restructuring options, as per the rumours.

As it stands, Chesapeake owes more than $10 billion in bonds and has a market capitalization of an estimated $1.2 billion. Nonetheless, a spokesperson for the energy giant stated that it had no intentions of filing for bankruptcy and that it was focused on delivering maximum value for investors.

With energy prices down over 70% since their peak in July 2015, Chesapeake is just one of many energy giants, once thought to be on an endless roll, to be facing severe and unrelenting pressure in current market conditions.

With speculation that Chesapeake was about to fold now over, we’ll have to wait and see if the firm can recover and regain its place as one of the most valuable energy firms on the street.

What do you think? Are some energy firms about to fold under the pressure of depressed energy markets? How long will this go on for? We’d love to hear from you.

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