Shale turmoil for US energy companies
Published by Elizabeth Corner,
Senior Editor
Oilfield Technology,
Shares of Chesapeake Energy Corp. have lost more than 50% in value as investors received a report that the Oklahoma-based company was working with bankruptcy advisers.
This also triggered a selloff in shares of pipeline company Williams, which derives 20% of its sales from moving Chesapeake’s natural gas from fields to markets.
Energy Transfer Equity LP, which has been trying to merge with Williams, also suffered as a result.
Chesapeake is reported to be more than US$11 billion in debt. The company confirmed it is working with longtime counsel Kirkland & Ellis LLP to strengthen its balance sheet, and said it “has no plans to pursue bankruptcy.” A Chesapeake spokesman declined to comment.
Chesapeake, whose debt is eight times its market value, is said to be looking at restructuring options.
Experts say they expect Chesapeake will try to renegotiate contract terms with pipeline companies.
Edited from various sources by Elizabeth Corner
Sources: Wall Street Journal, Reuters
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/10022016/shale-turmoil-for-us-energy-companies/
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