Shale oil giant, Chesapeake, to file for bankruptcy

American shale oil giant, Chesapeake Energy Corp said on Monday it was unable to access financing and was considering filing for bankruptcy.

Chesapeake said in a statement that the it could execute a court restructuring of its over $9 billion debt if oil prices don’t recover from the sharp fall caused by the COVID-19 pandemic.

The announcement follows last month’s statement by the pioneering shale gas producer that it was in talks to line up bankruptcy financing and was in talks for a loan to run its operations through the court proceedings.

Data compiled by Reuters citing the company’s filings showed it had a combined debt of more than $1 billion by way of debt maturities and interest expenses, of which $250 million in senior notes were due this year.

According to its full year 2019 results, Chesapeake said its total assets was in the region of $16.193 billion, but this value could be worth less than 10% of its total debt should global oil prices continues to plunge due to the adverse effects of COVID-19 lock downs.