MOSCOW (Sputnik) – Chesapeake Energy, a major oil and gas producer and a US shale pioneer hard-hit by the recent drop in oil prices, has filed for bankruptcy, the company announced in a statement.
According to the Sunday release, Chesapeake will operate as usual during the Chapter 11 process. The company has agreed with most creditors to eliminate $7 billion of debt and has secured $925 million in debtor-in-possession financing from certain lenders, which will provide it with necessary funds to continue operating through the bankruptcy.
Lawler assured that the company will emerge from the bankruptcy process a stronger and more competitive enterprise and thanked all employees for their commitment to improving capital efficiency and operational performance.
The US shale industry is entering a period of ‘great compression’ and could face up to $300 billion in losses and a wave of bankruptcies due to the coronavirus pandemic, a study released by the global accountancy firm Deloitte this month showed.
According to Deloitte’s new study, dubbed ‘The Great Compression: Implications of COVID-19 for the US Shale Industry’, about a third of today’s US shale operators are technically insolvent with oil prices at $35 per barrel, and some 50 percent at $20 per barrel.
The International Energy Agency announced this month that US oil production is set to fall by 0.9 million barrels per day this year and a further 280,000 barrels per day next year due to low oil prices, weak demand and limited storage availability.