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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chesapeake Energy Corporation | NASDAQ:CHK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 90.81 | 89.61 | 91.01 | 0 | 01:00:00 |
By Tess Stynes
Chesapeake Energy Corp. said it has reached an amended agreement with its lenders that affirmed the energy company's revolving credit facility at $4 billion but expanded the collateral backing the debt to include most of the company's assets.
The company's shares, down 71% in the past 12 months, were up 15% at $4.34 in recent trading, leading the gainers on the S&P 500.
According to a regulatory filing, the agreement includes "the granting of liens and security interests on substantially all of the company's assets, including mortgages encumbering 90% of all of the company's proved oil and gas properties, all hedge contracts and personal property" and other items.
Meanwhile, the next review of the credit facility's borrowing base was postponed to June 15, 2017, from Oct. 30, 2016, according to a regulatory filing. Afterward, the borrowing base will be redetermined semiannually.
Under the amended agreement, Chesapeake will be allowed to incur up to $2.5 billion of first-lien debt, with its existing lenders receiving priority when the debt is repaid. Chesapeake's senior secured debt ratio covenant was temporarily suspended until September 2017 and its interest coverage ratio requirement was reduced through March of next year.
Under the accord, the energy company is required to maintain liquidity of at least $500 million, which would increase to $750 million if certain credit metrics aren't met at year's end.
The Oklahoma City company, co-founded by the late Aubrey McClendon, has been working to shore up its balance sheet as commodity prices remain low. Chesapeake grew to become one of the dominant U.S. gas explorers during the shale boom. Fueled by cheap debt, the company expanded aggressively in Ohio, Texas and other parts of the U.S., becoming the second-largest U.S. natural-gas producer behind Exxon Mobil Corp.
Mr. McClendon died in a car crash last month, a day after he was indicted on a charge of conspiring to rig bids on oil and gas leases in Oklahoma. A pioneer the shale energy boom, his extreme risk-taking had caused him personal and professional financial hardships that spurred activist investors, including Carl Icahn, to oust him as Chesapeake's chief executive in 2013.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
April 11, 2016 15:08 ET (19:08 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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