Chesapeake Energy Corp. (NYSE: CHK) closed a private placement of $1.25 billion of debt on Oct. 5, shoring up capital for debt repayment 10 months after it said it had no plans to file for bankruptcy.
Chesapeake, struggling with a huge pile of debt taken for shale development, said it could convert the 10-year notes to equity in three years if its stock trades above 130% of the conversion price for a specified period.
The company also said it exchanged its common shares for preferred shares representing about $1.2 billion of liquidation value, at a discount of over 40%.
"Through the transactions that closed today, we have substantially improved our capital structure," Chesapeake CEO Doug Lawler said.
"These transactions represent major steps toward reaching our financial goals of $2 billion to $3 billion of debt reduction and growing production within free cash flow," Lawler added.
The company's total debt stood at about $8.7 billion as of June 30.
The Oklahoma City-based company said its cash on hand as of Sept. 30 was about $1 billion, pro forma for the convertible debt issuance.
Shares of the company were up 2 cents at $6.82 in extended trading.
RELATED:
Chesapeake Counters Market Knee-Jerk, Says It’s Not Filing Bankruptcy
Chesapeake Washes Its Hands Of Barnett, Gains Fewer Expenses
Recommended Reading
Private Equity: Seeking ‘Scottie Pippen’ Plays, If Not Another Michael Jordan
2024-01-25 - The Permian’s Tier 1 acreage opportunities for startup E&Ps are dwindling. Investors are beginning to look elsewhere.
Some Payne, But Mostly Gain for H&P in Q4 2023
2024-01-31 - Helmerich & Payne’s revenue grew internationally and in North America but declined in the Gulf of Mexico compared to the previous quarter.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.
In Shooting for the Stars, Kosmos’ Production Soars
2024-02-28 - Kosmos Energy’s fourth quarter continued the operational success seen in its third quarter earnings 2023 report.
Canadian Natural Resources Boosting Production in Oil Sands
2024-03-04 - Canadian Natural Resources will increase its quarterly dividend following record production volumes in the quarter.