Chesapeake Energy Emerges from Chapter 11 Bankruptcy
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Chesapeake Energy Corporation has successfully concluded its restructuring process and emerged from Chapter 11, satisfying all conditions precedent under its plan of reorganization.
“Today marks a new day for Chesapeake. We have fundamentally reset our business, and with an improved capital and cost structure, disciplined approach to capital reinvestment, diverse asset base and talented employees, we are poised to deliver sustainable free cash flow for years to come,” said Doug Lawler, Chesapeake’s president and chief executive officer.
“Additionally, our unwavering resolve to leading a responsible energy future has never been greater, and our pledge to achieve net zero GHG direct emissions by 2035, eliminate routine flaring on new completions immediately, and significantly reduce our methane and GHG emission intensity by 2025, place Chesapeake on a path toward setting a new standard of environmental excellence in our industry,” added Lawler.
“The new board of directors and I look forward to working with Doug and the entire Chesapeake team to build an enduring enterprise which creates sustainable value for our stakeholders by efficiently producing low-cost energy under the strictest environmental, social, and governance standards,” said Michael Wichterich, chairman of Chesapeake’s board of directors.
“As we look ahead, maintaining the strength of our balance sheet, our cost leadership position, and our steadfast commitment to delivering consistent returns, while lowering our emissions profile will be paramount to our success,” added Wichterich.
Operations Update
Chesapeake’s average daily production for the 2020 fourth quarter was approximately 435,000 barrels of oil equivalent (boe), and it projects its full year 2021 average daily production to be approximately 427,000 boe. The company’s planned capital expenditures for 2021 includes operating an average of six rigs and two stimulation crews with an estimated spend of approximately $700 million. Additional information about their strategy and 2021 outlook can be found HERE
New Board of Directors
In accordance with the plan, a new board of directors was appointed and includes Chairman Michael Wichterich, Timothy S. Duncan, Benjamin C. Duster, IV, Sarah Emerson, Matthew M. Gallagher, Brian Steck, and Doug Lawler. The board is establishing the company’s first Environmental and Social Governance Committee dedicated to ESG oversight and excellence. Biographies for the new board members can be found HERE
Highlights of the Reorganized Chesapeake include:
• Anticipated cumulative free cash flow of more than $2 billion over the next five years, providing stability and optionality to return cash to shareholders
• Targeting long-term net debt to EBITDAX ratio of less than 1.0 times
• Issued $1 billion senior unsecured notes at a weighted average coupon of less than 5.7 percent
• Disciplined capital reinvestment strategy of 60 percent to 70 percent of cash flow; 2021 activity focused on world-class natural gas assets
• The permanent elimination of over $1 billion in annual cash costs from 2019 levels with opportunities for additional reductions; top-quartile operating performance metrics vs. peer group
• Commitment to achieving net-zero GHG direct emissions by 2035, eliminating routine flaring on all wells completed on a go-forward basis, and meaningfully reducing methane and GHG intensity by 2025
• New board of directors nominated by long-term value-focused equity holders; newly formed ESG Committee dedicated to ESG oversight and excellence
About Chesapeake Energy
Headquartered in Oklahoma City, Chesapeake Energy Corporation’s operations are focused on discovering and responsibly developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States.
To stop by Chesapeake Energy’s website, CLICK HERE
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