Chesapeake Energy Corporation has efficiently concluded its restructuring course of and emerged from Chapter 11, satisfying all circumstances precedent underneath its Plan of Reorganization. The oil and gasoline firm from Oklahoma City filed from Chapter 11 in June 2020. Highlights of the reorganized Chesapeake embody:
• Anticipated cumulative free money stream of greater than $2 billion over the following 5 years, offering stability and optionality to return money to shareholders
• Targeting long-term web debt to EBITDAX ratio of lower than 1.zero instances
• Issued $1 billion senior unsecured notes at a weighted common coupon of lower than 5.7%
• Disciplined capital reinvestment technique of 60% to 70% of money stream; 2021 exercise centered on world-class pure gasoline belongings
• The everlasting elimination of over $1 billion in annual money prices from 2019 ranges with alternatives for extra reductions; top-quartile working efficiency metrics vs. peer group
• Commitment to reaching net-zero GHG direct emissions by 2035, eliminating routine flaring on all wells accomplished on a go-forward foundation, and meaningfully decreasing methane and GHG depth by 2025
• New Board of Directors nominated by long-term value-focused fairness holders; newly fashioned ESG Committee devoted to ESG oversight and excellence
Doug Lawler, Chesapeake’s President and Chief Executive Officer, commented, “Today marks a brand new day for Chesapeake. We have basically reset our enterprise, and with an improved capital and value construction, disciplined strategy to capital reinvestment, numerous asset base and proficient staff, we’re poised to ship sustainable free money stream for years to return. Additionally, our unwavering resolve to main a accountable power future has by no means been better, and our pledge to attain web zero GHG direct emissions by 2035, eradicate routine flaring on new completions instantly, and considerably scale back our methane and GHG emission depth by 2025, place Chesapeake on a path towards setting a brand new commonplace of environmental excellence in our business.”
Under the court-approved Plan, roughly $7.eight billion of debt has been equitized, and the corporate’s most well-liked and customary fairness pursuits have been cancelled as of February 9, 2021.
Chesapeake’s common each day manufacturing for the 2020 fourth quarter was roughly 435,000 barrels of oil equal (boe), and it initiatives its full 12 months 2021 common each day manufacturing to be roughly 427,000 boe. The firm’s deliberate capital expenditures for 2021 consists of working a mean of six rigs and two stimulation crews with an estimated spend of roughly $700 million.
(Source: Chesapeake Energy – Chesapeake flag on Comac rig)
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