Feb. 08--Chesapeake Energy Corp. shares lost a third of their value Monday as high volatility and heavy trading sent the stock tumbling.
The stock was down more than 50 percent before recovering somewhat after the company issued a news release denying published reports that the
Oklahoma City
energy company is working on a bankruptcy package.
"Chesapeake currently has no plans to pursue bankruptcy and is aggressively seeking to maximize value for shareholders," Chesapeake said in the statement Monday morning.
The release was issued after a report from Debtwire said Chesapeake had hired a firm to help it restructure its $9.8 billion debt.
Chesapeake said Monday that Kirkland & Ellis LLP has advised the company since 2010 and continues to provide advice as it "seeks to further strengthen its balance sheet following its recent debt exchange."
Chesapeake shares tumbled as much as 50 percent Monday morning, reaching a 17-year low before recovering some ground. Trading was halted at least 11 times because of volatility. The stock closed at $2.04, down $1.02, or 33 percent, on the day.
Chesapeake finished the day as the New York Stock Exchange's third-largest percent decliner Monday, behind only
Dallas
-based Energy Tranfer Equity and
Tulsa
-based
Williams Cos. Inc., which ETE is trying to buy.
Energy Transfer on Monday named a new chief financial officer, saying the previous CFO has left the company.
Industry volatility
Like most oil and natural gas firms, Chesapeake shares have been battered by low commodity prices over the past 18 months. The stock is down more than 90 percent over the past year.
Chesapeake last month suspended its preferred stock dividends. The company suspended its common dividend in July.
Local oil and natural gas companies are expected to announce their 2015 earnings reports and detail their 2016 budgets over the next few weeks. Industry research firm IHS said Monday the energy sector likely will see several difficult announcements in the first quarter.
"The depressed oil price environment is painting a gloomy outlook for North American exploration and production companies; and further, significant Capex (capital expenditure) cuts are needed in order for the group to demonstrate real financial discipline and align spending more closely with cashflow," IHS said.
Chesapeake Energy has scheduled its earnings announcement for Feb. 25.
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Source: Equities.com News
(February 8, 2016 - 12:10 PM EST)
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