Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
A floor crew pulls steel pipe out of a natural gas well in the Barnett Shale in Fort Worth, Texas. The 11,600-foot well is owned by Chesapeake Energy Corporation. Photo: Photo by Robert Nickelsberg/Getty Images
Chesapeake Energy Corp., a shale gas pioneer that helped launch the country's oil-and-gas boom well over a decade ago, filed for Chapter 11 bankruptcy protection on Sunday.
Why it matters: Oklahoma City-based Chesapeake is the highest-profile oil-and-gas company to file for bankruptcy during the COVID-19 pandemic, which has sapped prices and demand.
- But it also signals pre-pandemic financial woes that afflicted Chesapeake for years, and to some extent the shale sector overall, which has long struggled with debt and cash flow problems.
- "This filing has been a long time coming. It was likely going to happen with or without COVID-19," said Alex Beeker, an analyst with the consultancy Wood Mackenzie, in a note Sunday.
Driving the news: Chesapeake said Sunday that it has a restructuring plan with lenders to eliminate roughly $7 billion in debt.
- Chesapeake, co-founded in 1989 by the late and high-profile fracking pioneer Aubrey McClendon, said the agreement also includes $925 million in new financing and a commitment for $600 million in new equity upon exiting bankruptcy.
- "We are fundamentally resetting Chesapeake’s capital structure and business to address our legacy financial weaknesses and capitalize on our substantial operational strengths," CEO Doug Lawler said in a statement.
The big picture: The company was once the country's second-largest gas producer, per the Wall Street Journal.
- "Lawler had been trying to turn around the company by producing more oil and selling gas assets," the New York Times notes.
- "But the shale drilling boom of recent years has unleashed more crude oil than the world needs, sending prices lower. The coronavirus pandemic and a decision by Saudi Arabia and Russia this year to ramp up production were the latest blows," per NYT.