Chesapeake Misses Interest Payment, Line of Credit Drops $700M

Chesapeake’s Stock performance last 6 months (click for larger version)

On Monday Chesapeake Energy missed making two scheduled interest payments owed to the company’s noteholders totaling $13.5 million according to a Securities and Exchange Commission filing made yesterday. The company also reported to the SEC that its “borrowing base” (value of assets against which they can borrow, or their “line of credit”) has taken a hit too. Previously the borrowing base was $3 billion. It’s now $2.3 billion. Poof–$700 million disappeared just like that. The stock market pegs the value of the company, the company’s market capitalization, at $127 million. Given it carries debts of $9 billion, well, you do the math.
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PA Shale Drilling Permits Become Most Expensive in the Nation

In Ohio, it costs drillers $5,500 to file for and receive a permit to drill a new shale well. In West Virginia, the cost is $10,150. In Pennsylvania, it has cost drillers $5,000 for a new shale well permit. Following a meeting yesterday of the PA Independent Regulatory Review Commission (IRRC), PA’s permit fee is about to zoom to the top of the M-U list: $12,500 (2 1/2 times the previous fee). In fact, the cost of a shale permit in PA will become the highest in the country.
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Onshore Rig Count Hits New Low of 298 – Finds Bottom?

Last week S&P Global Platts reported the Enverus (Drillinginfo) rig count for the U.S. had slipped to a new all-time low of 299 (see U.S. Rig Count Goes Below 300 – Marcellus Gains 1, Utica Loses 2). This week for the first time in months, S&P didn’t bother to report on the latest Enverus rig count. So we have our own report. Overall rigs decreased by one more, to 298, over the past week, prompting some industry experts to speculate we’ve finally “hit bottom” with the rig count. Have we?
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Trump Administration Asks Supreme Court to Lift NP12 Permit Ban

A perceptive MDN reader emailed yesterday to ask us the status of the U.S. Army Corps of Engineers Nationwide Permit (NP) 12, blocked for all pipelines in May by a Montana federal judge appointed by Obama (see Obama Judge Blocks New Pipe Projects that Use NP12 Permit). We have an update on this important issue because it impacts ALL pipeline projects using NP12, including Mountain Valley Pipeline (MVP) and Atlantic Coast Pipeline (ACP).
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2 Gas-Fired Plants in NY, Mass. File Bankruptcy for Third Time

Talen Energy Corp. subsidiary NorthEast Gas Generation owns two natural gas-fired electric generation plants–one in Athens (Greene County), NY, and one in Charlton (Worcester County), MA. Yesterday Talen/NorthEast filed for Chapter 11 bankruptcy, the third time NorthEast has filed since 2014. The current plan is to hand over ownership to the company’s debtholders.
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Chesapeake Clucking About “Renewable” NatGas from Chicken Poop

Two weeks ago to the day MDN took a swipe at Chesapeake Utilities and their fascination with producing natural gas from chicken poop (see Chesapeake Utilities Turning Chicken Poop into “Renewable” NatGas). The larger purpose of that post was to puncture the balloon of so-called “renewable” natural gas (RNG). Here it is two weeks later and Chesapeake is once again clucking away more about their chicken poop renewables program. We couldn’t resist taking another swipe…
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Shale Energy Stories of Interest: Fri, Jun 19, 2020

OTHER U.S. REGIONS: Ovintiv lays off 25% of workforce after oil demand slumps; Report details benefits of natural gas across Illinois, especially during COVID-19 recovery; NATIONAL: Dow, Shell announce joint plans to develop electric cracking technology; The oil and gas situation: the E&P sector faces a reckoning; Failing cities and states use climate change lawsuits as fiscal escape hatch; INTERNATIONAL: 800 Enbridge workers voluntarily leaving company.
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