Chesapeake Loses $14.9B, Suspends New Utica/Marcellus Drilling

Hats off to Chesapeake Energy CEO (and Carl Ichan lackey) Doug Lawler for pulling a rabbit out of his hat. Everyone has thought for weeks that Chesapeake is headed for bankruptcy, given that it’s stock value has plunged nearly 90% over the past year and it faces a big debt repayment soon. But the latest quarterly (and full year) report, released yesterday, shows the company is holding its own and will live to fight another day. That good news sent CHK stock soaring, to close up 22% (if you call “soaring” going from $2.19 to $2.67 per share, when those same shares traded at ~$20/share a year ago). The big news coming from Chesapeake’s release yesterday of their fourth quarter and full year 2015 update is this: The company experienced a paper loss (not an out of pocket money loss) of $14.9 billion–a staggering number that’s hard to get your head around. The largest loss of any oil and gas company we’ve heard of–ever. But most of that “loss” was Chesapeake devaluing their assets due to low commodity prices. As we said, it wasn’t money out of pocket. The other big news (for MDN) is that Chesapeake is halting their drilling program in both the Ohio Utica and Pennsylvania Marcellus in 2016. Chessy is Ohio’s #1 driller–has been since Aubrey McClendon declared the Utica was the biggest thing to hit Ohio since the plow. Chesapeake is also Pennsylvania’s #1 driller, depending on how you measure it (they produce more natgas in PA than any other driller). Below is Chesapeake’s 4Q15 and full year 2015 update, along with other bits and bobs we found commenting on Chesapeake’s update (including a reference that Chesapeake’s stock rise of 22% yesterday is a “dead cat bounce”)…

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