Chesapeake Energy Emerges After Officially Clearing Bankruptcy
Chesapeake Energy Corp was once the second-largest natural gas company in the United States. These days, however, it is a shadow of its former self. On Tuesday, the company exited Chapter 11 protection and is making some significant changes.
This article will consider some modifications to Chesapeake's business model and give you an idea of what to expect from the company in the coming months.
As part of the restructuring plan, the company is reducing its staffing levels to adapt to the challenging market. Recently, Chesapeake announced their plans to cut its workforce by 15 percent. And just last week, they made another round of layoffs in Oklahoma City, where about 220 people were affected.
Free Cash Flow
Chesapeake is pledging to produce free cash flow, which is increasingly common in shale. This financial decision is not free from criticism from shareholders, who argue that this prioritizes production growth over investment returns.
Robert Lawler, who oversees the company, maintains that this plan will allow the company to return more cash to shareholders. It will also create the need for greater discipline regarding the management of the company's assets, holding them more accountable.
The company has announced that they will eliminate flaring by 2025. Flaring is the intentional burning off of excess gas at remote well sites. Furthermore, by 2035, Chesapeake plans to achieve net-zero greenhouse-gas emissions.
What's Next for Chesapeake?
With $1.3 billion of new financing, Chesapeake plans on focusing on gas drilling in the Haynesville region of Louisiana and Pennsylvania's Marcellus Shale. Harvesting these assets for free cash flow, the company will become a natural gas growth company.
Did you enjoy this article? If so, remember to subscribe and follow our website so you can stay up to date on the latest shale and natural gas news!