Chesapeake 1Q Net Loss Mind-Blowing $8.3 Billion – Bankruptcy Near
Chesapeake Energy issued its first-quarter 2020 update yesterday–but not in the typical fashion. They filed the required Form 10-Q with the Securities and Exchange Commission and announced they will not hold a conference call or webcast to discuss anything with anyone. No wonder. The financials for the company are dreadful. Chesapeake lost (on paper) $8.3 billion in 1Q20 due to the writedown of assets (called an impairment). It was not an out-of-pocket-cash loss, thank God. Still, it was bad enough. The 10-Q said “management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern” and there is a “likelihood of a restructuring or reorganization.”
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Energy Transfer (ET), one of the largest midstream (pipeline) companies in the U.S., is making another major cut in its 2020 capital budget. The company released its first-quarter update yesterday indicating it will cut spending this year by “at least” another $400 million, with a potential extra $300-$400 million cut later in the year. So spending may dip by most of billion dollars extra during 2020.
Ascent Resources, originally founded as American Energy Partners by gas legend Aubrey McClendon, is a privately-held company that focuses 100% on the Ohio Utica Shale. Ascent is Ohio’s largest natural gas producer and the 7th largest natural gas producer in the U.S. The company issued its first-quarter 2020 update last Friday. The company flew by producing 2 billion cubic feet equivalent per day (Bcfe/d) in 1Q, a new high.
New Fortress Energy, which focuses on producing, exporting, transporting, and importing (in other countries) LNG marches to the beat of a different drummer. The company recently issued its first-quarter 2020 update. On a conference call with analysts, New Fortress founder and CEO (and billionaire) Wed Edens said his company hasn’t applied for nor accepted any government money re the COVID-19 pandemic. They also haven’t laid anyone off. In fact, New Fortress boosted the salaries of frontline fuel workers by 50% for the months of April and May in recognition of the jobs they are doing and the risks they face during the pandemic.
LNG Limited (LNGL), based in Australia, has been working on a couple of North American LNG export projects over the past half-decade or more. One of them, Magnolia LNG, is located in Louisiana will potentially export M-U molecules. Magnolia has all of its permits and is ready to build–if someone has the money to build it. It won’t be LNGL. The company recently imploded and ended up in the hands of a bankruptcy administrator who is now selling off the assets.
The Trump Administration recently fixed a problem with the recently enacted CARES Act (Coronavirus Aid, Relief, and Economic Security Act) that will close an oversight preventing some oil and gas companies from using the program. Anti-fossil fuel haters who want to punish oil and gas companies are now hopping mad that Trump “bailed out” oil and gas companies.
MARCELLUS/UTICA REGION: The energy below: Fulbright scholar focuses on Utica Shale at Binghamton University; National Grid settles on two proposals to address looming NY gas shortage; OTHER U.S. REGIONS: Goodrich CEO strikes upbeat tone on natural gas price outlook; Manmade methane could replace natural gas, backers say; NATIONAL: What will follow the biggest us rig count collapse in history; Natural gas equities are just getting started; FERC expects minimal impact to operations after four workers test positive; Are we on the verge of a propane supply shortfall?; America’s oil and gas jobs could soon come roaring back.