Based in the state of Oklahoma Chesapeake Energy company, is considered one of the pioneers of the shale industry in the US, banks had to refinance almost all of its assets in exchange for receiving life-saving line of credit, the notice sent by the company to the Commission on securities and stock exchanges of the USA (SEC).
Under the agreement, the company has transferred to creditors — banks MUFG Union Bank N. A. and Wells Fargo Bank Securities as collateral 90% owned proved reserves of oil and gas, as well as most of their assets in real estate, derivative instruments, deposits and securities.
This has allowed the company to negotiate a loan in the amount of $4 billion In the course of negotiations, Chesapeake managed to achieve mitigation of a revolving loan maturing in 2019, and to defer assessment of company-owned stocks, the magnitude of which depends directly on the size of the credit line until June 2017. In particular, Chesapeake Energy has committed to the following estimates of reserves to maintain the liquidity level of $500 million.
Reached with creditors the agreement will give Chesapeake time to “overcome the negative factors of low energy prices,” said Bloomberg analyst at Citigroup Marisa moss. According to her, the company would have to raise an additional loan for calculation for the bonds with maturity in 2017 and 2018.
Investors took the news on the restructuring of credit lines and the softening of it with optimism. Shares of Chesapeake Energy, which recently became cheaper against fears of investors concerning debt of the manufacturer, at the end of trading on April 11 on the NYSE jumped 20%, to $4.5 per share. This is three times more than two months ago after the publication of Reuters about the possible bankruptcy of the company, but seven times less than at the peak in oil prices in June 2014.
Chesapeake is the second largest natural gas producer, after ExxonMobil, and the 12th largest producer of oil and condensate in the United States. The company was founded in 1989 and immediately made a bid for the development of horizontal drilling and the shale oil and gas, becoming one of the pioneers of this industry.
Continuing a year and a half of oil crisis has placed Chesapeake Energy on the brink of bankruptcy. Total debt by March 2016 reached $9.5 billion, while its market value is about $3 billion Net loss for 2015 exceeded $14.8 billion, the adjusted loss (net of estimated depreciation of the assets) amounted to $329 million
In early February, the Agency Reuters with reference to sources reported that Chesapeake hired a lawyer for possible filing for bankruptcy: she had barely enough cash to make a repayment on loans of $500 million, expiring in mid-March. Company officials said that plans for bankruptcy. But the publication of the annual report in late February showed that the situation in the energikoncernen worse than predicted Reuters: in the hands of the Chesapeake had only $400 million in cash.