Name: Chesapeake Energy filing for Chapter 11 bankruptcy protection, company announces
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Chesapeake Energy filing for Chapter 11 bankruptcy protection, company announces

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AdvertisementChesapeake Energy filing for Chapter 11 bankruptcy protection, company announcesHide TranscriptShow Transcript5. EVAN: WE START WITH A MAJOR STORY BREAKING OUT OF OKLAHOMA TODAY. CHESAPEAKE ENERGYSAYS IT IS FILING FOR CHAPTER ELEVEN BANKRUPTCY PROTECTION. GOOD EVENING. I'M EVAN ONSTOT. CHESAPEAKE, OF COURSE, THE ENERGY GIANT BASED OUT OF OKLAHOMA CITY AND ONE OF THE FRACKING PIONEERS. THE COMPANY, ONCE EMPLOYING ABOUT 13,000 PEOPLE ACROSS ALL ITS BUSINESSES NOW DOWN TO 1900 WITH 1300 WORKING HERE IN OKLAHOMA. IN A RELEASE TODAY CEO DOUG LEFT BEHIND BY THE COMPANY'S EARLIER FREESPENDING DAYS WAS IMPOSSIBLE TO OVERCOME ESPECIALLY WITH LOW ENERGY PRICES HURTING THE INDUSTRY. BUT THE COMPANY IS NOT SHUTTING DOWN. INSTEAD, THEY SAY THEY ARE RESTRUCTURING AND LAWLER SAYS ALL EMPLOYEES WILL CONTINUE TO GET PAID WITH BENEFITS. COMPANY CEO DOUG LAWLER TELLING HIS OWN EMPLOYEES IN AN INTERNAL MEMO THAT BUSINESS WILL CONTINUE THAT THEY WILL GET PAID. NORMAN POLICE ARE INVESTIGATING &gt;&gt; CHESAPEAKE, THEY ARE GOING TO CONTINUE TO NEED EMPLOYEES. THEY CAN'T JUST SHUT EVERYTHING DOWN. THEY MAY HAVE WELLS BEING DRILLED AND COMPLETED RIGHT NOW BUT FOR THE PRODUCING WELLS, THEY REQUIRE PEOPLE, COMPRESSOR OPERATORS. METER PEOPLE. EVAN: THAT IS JUST THE EMPLOYEES IN THE FIELD. MANY ARE NEEDED BEHIND THE SCENES RUNNING NUMBERS IN THE OFFICE. WE GOT OUR HANDS ON AN INTERNAL MEMO. HE IS TELLING THE EMPLOYEES THEY WILL CONTINUE TO BE PAID AND THEY WILL CONTINUE TO RECEIVE BENEFITS AND EVEN BONUSES. I ASKED WILL THERE BE MORE LAYOFFS? THE COMPANY DECLINED TO COMMENT ON WHAT FILING FOR CHAPTER 11 COULD MEAN FOR THE FUTURE OF THEIR NAMING RIGHTS TO CHESAPEAKE ENERGY ARENA. THE COMPANY COULD COME OUT OF RESTRUCTURING GOING FROM $9 BILLION. WHEN LALLER TOOK OVER, CHESAPEAKE HAD DEBTS TOTALING $21.5 BILLION. THAT IAdvertisementChesapeake Energy filing for Chapter 11 bankruptcy protection, company announcesChesapeake Energy is filing for Chapter 11 bankruptcy protection, the Oklahoma energy giant announced Sunday.The move follows years of efforts by the company to cut costs and reduce mountains of debt left behind by the free-spending leadership of former CEO Aubrey McClendon. Current CEO Doug Lawler says Chesapeake Energy will continue to operate as usual and pay its employees. Chapter 11 allows companies to restructure their debt and business, as opposed to a Chapter 7 bankruptcy, where a company will liquidate its assets and stop operating."We are fundamentally resetting Chesapeake's capital structure and business to address our legacy financial weaknesses and capitalize on our substantial operational strengths," Lawler said in a news release. "By eliminating approximately $7 billion of debt and addressing the legacy contractual obligations that have hindered our performance, we are positioning Chesapeake to capitalize on our diverse operating platform and proven track record of improving capital and operating efficiencies and technical excellence.""With these demonstrated strengths, and the benefit of an appropriately sized capital structure, Chesapeake will be uniquely positioned to emerge from the Chapter 11 process as a stronger and more competitive enterprise."In addition to securing financing to fund our ongoing operations and facilitate our exit from this process, we are pleased to have the support of our term loan lenders and secured note holders to backstop a $600 million rights offering, demonstrating their confidence in Chesapeake's operating platform and future." You can read the letter Lawler sent to employees here.No immediate or long-term impact was given for Chesapeake’s hundreds of employees, many of whom are based in Oklahoma. The company had been downsizing significantly in the past few years."We deeply appreciate the hard work and commitment of our employees, who remain focused on safely and efficiently executing our business," Lawler said. We look forward to working productively with our suppliers, business partners and all stakeholders throughout this process."Additional information about Chesapeake Energy's filing Sunday will be made available on its website. Court filings and information about the claims process are available here.Chesapeake was one of the pioneers of the shale revolution. Fracking allowed the company to grow and grow fast, but as debt piled on, energy prices could not keep up. Sources familiar with the challenges facing Chesapeake say the expansion and spending was reckless.Between 2010 and 2012, in two of the final years McClendon ran the company, Chesapeake spent roughly $30 billion more on drilling and leases than it made in its operations.Sources talk of lavish spending on employee perks and amenities for its Oklahoma City campus. A person familiar with the company’s spending says Chesapeake was paying for large charitable donations by borrowing money.McClendon was forced out in 2013. When current CEO Doug Lawler took over, Chesapeake had $21.5 billion in debt and liabilities on its books, which was nearly as much as Exxon and Chevron combined. Chesapeake eliminated much of the debt, but yearly interest payments became too much as energy prices dropped and stayed low. Speculation had picked up considerably in recent months about impending bankruptcy. The company this year kept itself on the New York Stock Exchange by asking its stockholders to agree to a reverse stock split, in essence cutting the number of shares but greatly increasing their value."Over the last several years, our dedicated employees have transformed Chesapeake's business — improving capital efficiency and operational performance, eliminating costs, reducing debt and diversifying our portfolio," Lawler said. "Despite having removed over $20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business."Chesapeake Energy and McClendon, its founder, have had a massive impact on the development of Oklahoma City. McClendon was one of the leading forces to bring the Seattle SuperSonics to Oklahoma, and was one of the owners of the newly named Oklahoma City Thunder. The arena the NBA team now plays in is the Chesapeake Energy Arena.There's no immediate word on how Sunday's news impacts that naming agreement. Development in the area surrounding the company’s campus can be directly tied to Chesapeake, including Classen Curve and the arrival of upscale grocery chain Whole Foods.Chesapeake Energy is filing for Chapter 11 bankruptcy protection, the Oklahoma energy giant announced Sunday.The move follows years of efforts by the company to cut costs and reduce mountains of debt left behind by the free-spending leadership of former CEO Aubrey McClendon.AdvertisementCurrent CEO Doug Lawler says Chesapeake Energy will continue to operate as usual and pay its employees. Chapter 11 allows companies to restructure their debt and business, as opposed to a Chapter 7 bankruptcy, where a company will liquidate its assets and stop operating."We are fundamentally resetting Chesapeake's capital structure and business to address our legacy financial weaknesses and capitalize on our substantial operational strengths," Lawler said in a news release. "By eliminating approximately $7 billion of debt and addressing the legacy contractual obligations that have hindered our performance, we are positioning Chesapeake to capitalize on our diverse operating platform and proven track record of improving capital and operating efficiencies and technical excellence.""With these demonstrated strengths, and the benefit of an appropriately sized capital structure, Chesapeake will be uniquely positioned to emerge from the Chapter 11 process as a stronger and more competitive enterprise."In addition to securing financing to fund our ongoing operations and facilitate our exit from this process, we are pleased to have the support of our term loan lenders and secured note holders to backstop a $600 million rights offering, demonstrating their confidence in Chesapeake's operating platform and future."No immediate or long-term impact was given for Chesapeake’s hundreds of employees, many of whom are based in Oklahoma. The company had been downsizing significantly in the past few years."We deeply appreciate the hard work and commitment of our employees, who remain focused on safely and efficiently executing our business," Lawler said. We look forward to working productively with our suppliers, business partners and all stakeholders throughout this process."Additional information about Chesapeake Energy's filing Sunday will be made available . Court filings and information about the claims process .Chesapeake was one of the pioneers of the shale revolution. Fracking allowed the company to grow and grow fast, but as debt piled on, energy prices could not keep up. Sources familiar with the challenges facing Chesapeake say the expansion and spending was reckless.Between 2010 and 2012, in two of the final years McClendon ran the company, Chesapeake spent roughly $30 billion more on drilling and leases than it made in its operations.Sources talk of lavish spending on employee perks and amenities for its Oklahoma City campus. A person familiar with the company’s spending says Chesapeake was paying for large charitable donations by borrowing money.McClendon was forced out in 2013. When current CEO Doug Lawler took over, Chesapeake had $21.5 billion in debt and liabilities on its books, which was nearly as much as Exxon and Chevron combined. Chesapeake eliminated much of the debt, but yearly interest payments became too much as energy prices dropped and stayed low. Speculation had picked up considerably in recent months about impending bankruptcy. The company this year kept itself on the New York Stock Exchange by asking its stockholders to agree to a reverse stock split, in essence cutting the number of shares but greatly increasing their value."Over the last several years, our dedicated employees have transformed Chesapeake's business — improving capital efficiency and operational performance, eliminating costs, reducing debt and diversifying our portfolio," Lawler said. "Despite having removed over $20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business."Chesapeake Energy and McClendon, its founder, have had a massive impact on the development of Oklahoma City. McClendon was one of the leading forces to bring the Seattle SuperSonics to Oklahoma, and was one of the owners of the newly named Oklahoma City Thunder. The arena the NBA team now plays in is the Chesapeake Energy Arena.There's no immediate word on how Sunday's news impacts that naming agreement. Development in the area surrounding the company’s campus can be directly tied to Chesapeake, including Classen Curve and the arrival of upscale grocery chain Whole Foods.Loading more articles...

AdvertisementChesapeake Energy filing for Chapter 11 bankruptcy protection, company announcesHide TranscriptShow Transcript5. EVAN: WE START WITH A MAJOR STORY BREAKING OUT OF OKLAHOMA TODAY. CHESAPEAKE ENERGYSAYS IT IS FILING FOR CHAPTER ELEVEN BANKRUPTCY PROTECTION. GOOD EVENING. I'M EVAN ONSTOT. CHESAPEAKE, OF COURSE, THE ENERGY GIANT BASED OUT OF OKLAHOMA CITY AND ONE OF THE FRACKING PIONEERS. THE COMPANY, ONCE EMPLOYING ABOUT 13,000 PEOPLE ACROSS ALL ITS BUSINESSES NOW DOWN TO 1900 WITH 1300 WORKING HERE IN OKLAHOMA. IN A RELEASE TODAY CEO DOUG LEFT BEHIND BY THE COMPANY'S EARLIER...

Chesapeake Energy filing for Chapter 11 bankruptcy protection, company announces

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