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