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.