Tags: Chesapeake | energy | gas | writedown

Chesapeake Posts Collateral, Expects 'Significant Writedowns'

Friday, 26 Feb 2016 02:13 PM

Chesapeake Energy Corp. said it’s been asked to post $220 million in collateral by companies it does business with, a figure that could swell to $698 million, as the battered natural-gas driller tries to fend off concerns it can survive the commodity-price crash.

The company also expects “further significant writedowns" in the value of its gas and oil properties if prices continue to remain low, according to a regulatory filing on Thursday. That would follow $18.2 billion in writedowns already taken by the Oklahoma City-based driller in 2015.

Chesapeake, the biggest U.S. gas producer after Exxon Mobil Corp., has been cutting workers, restructuring debt and canceling projects as it seeks to raise cash amid questions about whether it can meet its financial obligations. Its shares jumped 23 percent yesterday after the company said it will pay off the remainder of a half-billion dollar debt that’s coming due in three weeks with proceeds from asset sales. The shares were down 0.7 percent to $2.67 at 2:20 p.m. in New York.

In Thursday’s filing, Chesapeake said it has already posted $92 million in collateral at the request of parties it owes money, primarily in the form of letters of credit and cash. “We may be requested or required by other counterparties to post additional collateral in an aggregate amount of approximately $698 million," it said in the filing.

 

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Chesapeake Energy Corp. said it's been asked to post $220 million in collateral by companies it does business with, a figure that could swell to $698 million, as the battered natural-gas driller tries to fend off concerns it can survive the commodity-price crash.
Chesapeake, energy, gas, writedown
226
2016-13-26
Friday, 26 Feb 2016 02:13 PM
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