Oklahoma City’s Chesapeake Energy continues working to emerge from its Chapter 11 bankruptcy by early 2021 and as such, has entered into a confidentiality agreement with some of the holders of its debt.
A filing of a Form 8-K with the Securities Exchange Commission indicated that as part of the agreement, Chesapeake agreed to publicly disclose some information including efforts to sell some of its holdings.
The agreement still musts be approved by the bankruptcy court but as indicated, “the Debtors believe that the Plan1 meets the feasibility requirement set forth in section 1129(a)(11) of the Bankruptcy Code.”
“—the Debtors analyzed their ability to satisfy their post-Effective Date financial obligations while maintaining sufficient liquidity and capital resources,” continued the SEC filing.
The filing stated that the debtors don’t normally publish their business plans or strategies and likely won’t furnish any as they work toward reorganization.
Chesapeake revealed that its operations will be in five key regions, Appalachia, Brazos Valley, Gulf Coast, South Texas and Powder River Basin while “the Mid-Continent asset is actively in a sales process and is not included in the financial projections.”
Chesapeake’s Mid-Continent area caught the attention of the Motley Fool in March of 2019.
“Chesapeake Energy isn’t currently investing much capital in Oklahoma’s STACK/SCOOP plays as it only expects to run one drilling rig this year. That has it on track to finish 25 wells, which is fewer than the 38 it brought on line last year. However, the company controls roughly 768,000 net acres in the state, which hold significant oil and natural gas liquids potential.”
The company’s holdings in the Powder River Basin amount to approximately 250,000 acres. Its $4 billion acquisition of WildHorse Resource Development gave it 420,000 acres in eastern Texas covering the Eagle Ford shale and Austin Chalk plays.
The SEC filing showed Chesapeake has $2.5 billion of potential savings opportunities, “some or all of which may or may not be achieved.”
It stated that $1.75 billion are part of the business plan of which $700-$900 million are subject to ongoing negotiation.
Click here to view the SEC filing.