Chesapeake Energy Corporation reported a net loss of $8.31 billion on $2.52 billion of total revenues for the three months ended March 31, 2020, compared to a net loss of $21 million on $2.16 billion of total revenues for the three months ended March 31, 2019.
As of March 31, 2020, the Company had $7.81 billion in total assets, $2.26 billion in total current liabilities, $9.47 billion in total long-term liabilities, and a total deficit of $3.92 billion.
As of March 31, 2020 and Dec. 31, 2019, the Company had a cash balance of $82 million and $6 million, respectively. As of March 31, 2020 and Dec. 31, 2019, the Company had a net working capital deficit of $442 million and $1.141 billion, respectively. As of March 31, 2020 and Dec. 31, 2019, the Company’s working capital deficit included $420 million and $385 million, respectively, of debt due in the next 12 months. As of March 31, 2020, the Company had $1.011 billion of borrowing capacity available under its revolving credit facility, with outstanding borrowings of $1.900 billion and $89 million utilized for various letters of credit.
Chesapeake said, “We closely monitor the amounts and timing of our sources and uses of funds, particularly as they affect our ability to maintain compliance with the financial covenants of our revolving credit facility. Furthermore, our ability to generate operating cash flow in the current commodity price environment, sell assets, access capital markets or take any other action to improve our liquidity and manage our debt is subject to the risks discussed above and the other risks and uncertainties that exist in our industry, some of which we may not be able to anticipate at this time or control.
“We currently have no access to capital and other financial markets. In response to the lack of new capital and funding, we are considering strategic alternatives, which may include but are not limited to additional expense reductions; seeking a restructuring, amendment or refinancing of existing debt through a private restructuring; and reorganization under Chapter 11 of the Bankruptcy Code. Additionally, our customers and counterparties are experiencing uncertain economic conditions which may impact their ability to make payments to us, which could adversely affect our business, cash flows, liquidity, financial condition and results of operations.
“We cannot predict the full impact that COVID-19 or the significant disruption and volatility currently being experienced in the oil and natural gas markets will have on our business, cash flows, liquidity, financial condition and results of operations at this time due to numerous uncertainties. The ultimate impacts will depend on future developments, including the ultimate geographic spread of the virus, the consequences of governmental and other measures designed to prevent the spread of the virus, the development of effective treatments, the duration of the outbreak, actions taken by members of OPEC+ and other foreign, oil-exporting countries, governmental authorities, customers and other third parties, workforce availability, and the timing and extent to which normal economic and operating conditions resume.”
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Headquartered in Oklahoma City, Chesapeake Energy Corporation’s (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States.
Chesapeake reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the Company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity.
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As reported by the TCR on April 29, 2020, Moody’s Investors Service downgraded Chesapeake Energy Corporation’s Corporate Family Rating to Ca from Caa1. The downgrade reflects Chesapeake’s eroding liquidity, the prospect of significant production declines due to substantially reduced capital investment, a depressed commodity price environment, very limited access to capital, and the high likelihood of a restructuring in the near term.