NEW YORK – Chesapeake Energy sought to assure investors Monday that it is not planning to file for bankruptcy protection. The announcement came after a news report that said it hired a law firm spooked investors and sent its stock plummeting.
The natural gas producer said it is working with Kirkland & Ellis to “strengthen its balance sheet” and currently has “no plans” to file for bankruptcy. Chesapeake said the law firm has advised the company for about 6 years. On its website, Kirkland & Ellis says it works with clients to help with litigation, taxes, intellectual property and restructuring matters.
Chesapeake has struggled as natural gas prices have declined. The Oklahoma City company has slashed spending, sold assets and cut jobs to save money. Last month, it also ended dividend payments for its preferred stock, a move that saves the company $170 million per year.
The company is scheduled to report quarterly results later in February. For the nine months ended Sept. 30, Chesapeake Energy lost $12.63 billion, or $19.07 per share, compared with a year-earlier profit. Results were weighed down by hefty asset impairment charges. Revenue was $8.69 billion, down 45 per cent from the same nine-month period in 2014.
Shares of Chesapeake Energy Corp. fell $1.02, or 33 per cent, to close at $2.04. Its shares are down about 90 per cent in the last year.