Chesapeake Energy & Total Beat Class Action Royalty Lawsuit in OH

In 2015 a group of Ohio landowners did what landowners had previously done in Pennsylvania, Texas and elsewhere–they filed a proposed class-action lawsuit against Chesapeake Energy claiming Chessy had screwed them and about 1,000 other Ohio landowners out of a collective $30 million in royalty payments (see OH Landowners File Royalty Class Action Lawsuit Against Chesapeake). It took nearly five years with a lot of twists and turns, but yesterday the U.S. District Court for the Northern District of Ohio ruled in favor of Chesapeake, dismissing the claims against them.
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Chesapeake Energy Hires “Restructuring Advisers”

Over the past half-decade or more we’ve read and often reported on rumors and speculation that Chesapeake Energy Corporation, co-founded by Aubrey McClendon (who was later ousted by corporate raider Carl Icahn) would have to declare bankruptcy. Aubrey loaded the company up with debt. His successor, Doug Lawler, has tried to whittle that debt down, but he’s done his own fair share of larding the company up with debt too (see Chesapeake Now Gone from Ohio Utica; Spends $4B in Eagle Ford. Reuters is reporting the company has just hired “restructuring advisers.” A euphemism for bankruptcy advisers?

NOTE: We’ve been contacted by several readers to alert us that the restructuring advisers hired by Chessy were used by the company previously to restructure debt in 2016 (without filing for bankruptcy). Did we jump to the wrong conclusion about their hiring this time? Perhaps! Time will tell.
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Chesapeake Floats Reverse Stock Split – Turn 200 Shares into 1

Last December the New York Stock Exchange sent Chesapeake Energy an official notification that the company’s stock price has fallen below the $1/share threshold for more than 30 consecutive trading days and because of it, Chessy’s stock will be delisted from the exchange–unless it can boost the share price within a certain period of time (see NYSE Warns Chesapeake Energy Stock to be Delisted…Unless). Speculation immediately began that Chessy would do a reverse stock split–combining multiple shares into a single share, thereby boosting the price of the remaining shares. Yesterday Chesapeake announced they will ask shareholders to approve such a reverse split.
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Chesapeake Survival Mode: Sell $500M Assets, Reverse Stock Split

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The future for Chesapeake Energy is, according to some, in serious doubt. Yesterday CEO Doug Lawler unveiled his strategy for keeping the company afloat. His strategy is to sell up to $500 million worth of “non-core” shale assets (in a down market, flooded with shale assets), and do a reverse stock split. Lawler’s plan and the company’s 2019 annual update spooked investors and Chessy’s share price collapsed down to $0.31/share (down even more this morning)–the lowest it has EVER been since the company went public in 1993. With some $9 billion in debt hanging around its neck, the company faces a big challenge in staying out of bankruptcy court.
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Chesapeake 4Q19 Update – Using Pad Compressors in Marcellus

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Chesapeake Energy released preliminary 2019 fourth quarter production and operational results yesterday. The company said it’s making progress with reducing its mammoth debt. Oil production, which the company increasingly focuses on, was 6% higher in 4Q19 than 4Q18. But the stock price remains low, bumping along just above $0.50 per share (in danger of being delisted, see NYSE Warns Chesapeake Energy Stock to be Delisted…Unless). As always, our interest is in Chesapeake’s prolific Marcellus program. Although the Marcellus only gets a brief mention in this update, what they said certainly caught our attention.
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Big M-U Drillers Slash 2020 Spending a Collective 25%

For months MDN has brought you bits and pieces of news from individual drillers, detailing plans to cut back on spending for new drilling in the Marcellus/Utica in 2020. It’s not just happening in the M-U–it’s happening across the country. The experts at RBN Energy have a terrific new post that pulls information about major drillers scaling back into one place. They analyze spending by three different groups of drillers: oil-focused, diversified, and gas-focused drillers. In the third category, all but one of the gas-focused drillers have major operations in the M-U. The stats are sobering. As a collective group, M-U gas drillers have pledged to cut their 2020 budgets 25% from the already-lower spending that happened this year. Ouch.
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NYSE Warns Chesapeake Energy Stock to be Delisted…Unless

Last week Chesapeake Energy received a notification from the New York Stock Exchange that its shares of stock have fallen below the $1/share threshold for more than 30 consecutive trading days and because of it, Chessy’s stock will be delisted from the exchange. Unless. Unless they can get the per share price over the $1/share average in a certain period of time. Chesapeake has responded they are taking several actions, the most relevant/likely being a reverse stock split.
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IEEFA Report Says Marcellus/Utica Drillers in Financial Trouble

Masquerading as a nonpartisan, independent nonprofit, the Institute for Energy Economics and Financial Analysis (IEEFA) reportedly “conducts research and analyses on financial and economic issues related to energy and the environment.” The Institute’s stated mission is “to accelerate the transition to a diverse, sustainable and profitable energy economy.” In other words, they’re anti-fossil fuels. We spotted an article appearing on OilPrice.com that quotes a new “study” issued by IEEFA. The article opens by saying, “drillers in Appalachia are in particularly bad shape.” Is it true? Is the end near? Is it a shalepocalypse?
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Chesapeake Arranges $1.5B Loan to Pay Off Old Debt, Stock Soars

In an impressive feat of financial jiu-jitsu, Chesapeake Energy has just snapped closed the mouths of those who said the company was imminently heading for bankruptcy following the company’s third quarter update (see Chesapeake Energy 3Q – Slash Drilling 30%, Bankruptcy Possible). Yesterday Chessy issued three press releases to announce it has swapped out some of its old debt for 70 cents on the dollar, and has arranged a 4 1/2 year loan for $1.5 billion. Chesapeake stock soared 17% higher on the news.
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Chesapeake Energy Stock in Trouble – Delist? Reverse Split?

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Two weeks ago MDN brought you news about Chesapeake Energy from their third quarter 2019 update (see Chesapeake Energy 3Q – Slash Drilling 30%, Bankruptcy Possible). A number of news outlets and analysts focused on a legalese notification in Chessy’s SEC filing that stated IF certain things happen the company MAY HAVE issues continuing as a “going concern.” The chattering class jumped on that to say the company is sure-enough heading for bankruptcy. Since that time the stock market has not been favorable to the company.
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Investor Says Chesapeake NOT in Danger of Bankruptcy

Yesterday MDN brought you news about Chesapeake Energy and their third quarter update (see Chesapeake Energy 3Q – Slash Drilling 30%, Bankruptcy Possible). As we pointed out in our summary of the update, many news outlets were focusing on a legalese notification in Chessy’s SEC filing that states IF certain things happen the company MAY HAVE issues continuing as a “going concern.” The chattering class jumped on that to say the company is heading for bankruptcy. We spotted an article that takes a contrarian point of view, calling Chessy’s statement “much ado about nothing.”
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Chesapeake Energy 3Q – Slash Drilling 30%, Bankruptcy Possible

Chesapeake Energy, still with a sizable amount of acreage and shale wells in the Pennsylvania Marcellus, issued its third quarter update yesterday. Which happened to set off the chattering class buzzing about the possibility the company is close to declaring bankruptcy. This isn’t the first time “experts” have declared Chessy is close to bankruptcy (see this MDN post from 2016: Latest SEC Filing Shows Chesapeake Doesn’t Rule Out Bankruptcy).
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Chesapeake Royalty Lawsuit at PA Supreme Court – Can of Worms?

Yesterday MDN brought you the news the Pennsylvania Supreme Court has agreed to hear a case challenging whether or not the state Attorney General’s office has the right to use a consumer protection law to prosecute companies like Chesapeake Energy and Anadarko over royalty payment shenanigans (see PA Supremes to Consider Long-Running Chesapeake Royalty Lawsuit). The law the AG’s office wants to use has never been used that way before. According to legal experts, drillers are very concerned if the AG’s office wins this one.
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PA Supremes to Consider Long-Running Chesapeake Royalty Lawsuit

In December 2015, Pennsylvania’s felony-indicted Attorney General, Kathleen Kane (who later was convicted and did jail time) brought a lawsuit against Chesapeake Energy and Anadarko accusing them of royalty fraud (see PA Atty General Sues Chesapeake Energy, Williams for Royalty Fraud). Her successor, Josh Shapiro, has continued the fight.
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Ohio Landowners Lose Royalty Lawsuit Against Chesapeake Energy

A group of Ohio landowners sued Chesapeake Energy in 2015 in a class action, alleging that Chesapeake had shorted them on royalty payments (see OH Landowners File Royalty Class Action Lawsuit Against Chesapeake). Four long years later and an Ohio federal judge ruled yesterday…in favor of Chesapeake.
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Fed Court OKs OH Class Action Royalty Lawsuit Against Cheseapeake

In 2017 a group of Ohio landowners did what others had previously done in Pennsylvania, Texas and elsewhere–they filed a proposed class action lawsuit against Chesapeake Energy claiming Chessy had screwed them and about 1,000 other Ohio landowners out of a collective $30 million in royalty payments (see OH Landowners File Royalty Class Action Lawsuit Against Chesapeake).
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