A total of 227 companies have filed for bankruptcy in the five years that ended May 31, involving more than $134 billion in aggregate debt. That compares with 42 for all of North America in 2019, according to the Haynes and Boone Oil Patch Bankruptcy Monitor. Nineteen American oil and gas producers have already filed for bankruptcy this year, including Ultra Petroleum and Whiting Petroleum. Shares of the company had climbed roughly 300 percent since a 1-for-200 reverse stock split in mid-April until Tuesday’s sharp decline.īut the company’s bonds have been trading below 10 percent of their face value, suggesting that debt investors had little confidence in Chesapeake’s ability to repay the money it owes. On Monday, Chesapeake shares nearly tripled in value on heavy volume amid 22 trading halts before Bloomberg News reported that the company was planning to seek bankruptcy protection. There have been rumors of a bankruptcy for months, but over the last few days, trading in the company’s stock has been tumultuous. “It’s sad that it has come to this, but it is also a big reminder that no one is too big to fail.” That compares favorably with OXY’s P/CF of 15.6. Wallace, president of Columbus Oil, an Oklahoma company. On a Price to Cash Flow (P/CF) basis, PE is undervalued with a multiple of 13.5. “Chesapeake was a real icon of what the oil business can do,” said Darlene S. Lawler has said Chesapeake, which employs 1,900 people, intended to continue operating the business if it filed for bankruptcy. The economic slowdown after the spread of the coronavirus was the latest blow. But the boom in shale drilling in recent years also produced a glut in crude oil, sending prices lower. Lawler, tried to revive Chesapeake by producing more oil and selling gas assets. The company’s current chief executive, Robert D. It is the latest of more than a dozen heavily indebted oil and gas businesses to seek bankruptcy protection since the coronavirus pandemic took hold and Saudi Arabia and Russia flooded the global market with oil this spring. But the company overextended itself by amassing a large debt and has been struggling to survive over the last decade. The company’s shares closed just below $24 for a loss of about 66 percent for the day.Ĭhesapeake’s successes at using hydraulic fracturing to produce gas helped convert the United States from a natural gas importer into a major global exporter. After buying and selling resumed, the trading was quickly interrupted again by circuit breakers. Trading was halted for more than three hours in the morning. HOUSTON - Shares of Chesapeake Energy, a pioneer in extracting natural gas from shale rock that came to be known for its excesses, including a scheme to suppress the price of oil and gas leases, went on a wild ride on Tuesday amid reports that it was preparing a bankruptcy filing.
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