Chesapeake Energy preparing for bankruptcy

[stroker-c10]

I personally was kind of surprised that they made it this far. They invested heavily early on in natural gas in the belief that it was going to take off when it never really has. They had some of the best leases on natural gas from here to Pennsylvania, but natural gas prices didn't rise like they had hoped. Hope they can recover but that is a pretty large chunk of debt. Unit Corp filed for bankruptcy not long before them, but they only had about 750 million in debt vs the 8-10 billion Chesapeake is looking at. Really hope that the O&G market starts to look better for us involved, as it has been a pretty gloom place for the past several years.

 

[Oklahomabassin]

They will be selling their assets to a company that has some cash. btw, I wondered how their stock went from $0.15 per share to $40.00 per share.
They did a 1 - 200 reverse stock split. That means for every 200 shares you had, you now have 1. They had to do this or they would have been delisted from the NYSE.

Here's the adjusted stock price range for the year. Yes, the adjusted high price is $588.00 and the low is $12.30.

52 Week Range $12.30 - $588.00


Yesterday they dropped $9.35 (-34.82%)

and the Pre-Market is $16.90 -1.24 (-6.84%)

It hit $77 near mid day today.

 

[SlugSlinger]

As in up over 180%. Crazy stuff. They are by no means out of the bankruptcy woods.

 

[Oklahomabassin]

As in up over 180%. Crazy stuff. They are by no means out of the bankruptcy woods.

View attachment 164911

Absolutely right about that. Some people made some money quick.

 

[retrieverman]

I’m losing my a$$ on Chesapeake, because I got royally screwed on the reverse split. I want out but missed today’s high. At this point, I’ll take a loss just to get rid of the stock.

 

[Shadowrider]

They are up 300% since April 15 when the stock split took effect. I have no idea why other than maybe some are ignorant that the stock was split 1 for 200 shares? They are down 18% in afterhours since Bloomberg published an article about an expected bankruptcy filing and giving control to creditors. I hope everybody sold because tomorrow and the next few days could be really ugly.

ETA: @retrieverman IDK how the split hurt you. If you had 200 shares you now only have one but the price was set at the value of the 200. Anyway, sell that **** at the open tomorrow! It'll give you some of that gain since the split at least.

 

[Shadowrider]

I personally was kind of surprised that they made it this far. They invested heavily early on in natural gas in the belief that it was going to take off when it never really has. They had some of the best leases on natural gas from here to Pennsylvania, but natural gas prices didn't rise like they had hoped. Hope they can recover but that is a pretty large chunk of debt. Unit Corp filed for bankruptcy not long before them, but they only had about 750 million in debt vs the 8-10 billion Chesapeake is looking at. Really hope that the O&G market starts to look better for us involved, as it has been a pretty gloom place for the past several years.

They still have a fantastic land portfolio. Their NG reserves are only bested by one company AFAIK, that company is ExxonMobil. They also bought a smaller company out that was a player down in the Permian not too terribly long ago, that gave them more oil on the books. Their reserves are what may give them a chance after coming out of bankruptcy as long as they have enough left. If you want to speculate on a long position, waiting until after they come out of bankruptcy would be the time to buy. Their debt load will be lighter then.

 

[stroker-c10]

I personally was kind of surprised that they made it this far. They invested heavily early on in natural gas in the belief that it was going to take off when it never really has. They had some of the best leases on natural gas from here to Pennsylvania, but natural gas prices didn't rise like they had hoped. Hope they can recover but that is a pretty large chunk of debt. Unit Corp filed for bankruptcy not long before them, but they only had about 750 million in debt vs the 8-10 billion Chesapeake is looking at. Really hope that the O&G market starts to look better for us involved, as it has been a pretty gloom place for the past several years.

They still have a fantastic land portfolio. Their NG reserves are only bested by one company AFAIK, that company is ExxonMobil. They also bought a smaller company out that was a player down in the Permian not too terribly long ago, that gave them more oil on the books. Their reserves are what may give them a chance after coming out of bankruptcy as long as they have enough left. If you want to speculate on a long position, waiting until after they come out of bankruptcy would be the time to buy. Their debt load will be lighter then.

To elaborate, they have always had great reserves in NG. The problem I am suggesting was that they primarily focused on these with the expectation of them growing exponentially and that did NOT happen. The oil assets help their portfolio and the NG assets COULD if it was the market they originally hoped for. In the short term, I don't speculate that those reserves will bring the value that they need to save their portfolio. Just my early speculation and I HOPE I am wrong.

 

[Shadowrider]

To elaborate, they have always had great reserves in NG. The problem I am suggesting was that they primarily focused on these with the expectation of them growing exponentially and that did NOT happen. The oil assets help their portfolio and the NG assets COULD if it was the market they originally hoped for. In the short term, I don't speculate that those reserves will bring the value that they need to save their portfolio. Just my early speculation and I HOPE I am wrong.

Oh I'm not saying you're wrong, I think you are actually pretty close.

I remember Aubrey McClendon complaining about how gas prices had historically always tracked with oil prices but somewhere changed. In the early 2000s (IIRC) they broke from each other. He stated he didn't know why that happened and there wasn't any real reason for it as he saw it. When CHK started up and being small they just drilled in Oklahoma and expanded into other states as they grew. Focusing on NG, this made sense as Oklahoma is a predominately NG state. Most oil wells here produce more gas than oil. It's not that way everywhere but in OK it is.

We also didn't have LNG to any real extent back then but now we can export it. That could help but other countries are also building or have built huge LNG terminals, Qatar being just one.

It'll be interesting to see if they can make it. I hope they can and with a little help from karma they have the ability.

 

[CHenry]

McClendon had leveraged the company way to far and no one following him cleaned up the mess completely and then a further drop in oil did them in.