UPDATE 4/25/15 Swift Energy avoided bankruptcy (for now?)
UPDATE 4/19/16 Another one-this one a spin of off Chesapeake called SeventySeven
UPDATE 4/18/16 MORE TX bankruptcies
As of December 31, 2015, Chesapeake had $9.7 billion of outstanding debt. But saved by the banks (the BERNIE cringe?) is what this article says….
http://seekingalpha.com/news/3172735-chesapeake-energy-plus-67-percent-two-days-4b-credit-base-maintained On 4/12/16 Seekingalpha writer wrote of Chesapeake “renewed credit agreement at a time when many oil and gas producers are bracing for large cuts to their credit lines;…”
The banks are betting this low NG cost environment won’t last long. I’ve read comments on how and when NG pricing “should” go back up:
- that once the oil glut goes away (hyperbolic decline curve + the slow down of spudding new wells)
- that the rebound of oil prices will extend to the NG sector and raise it’s pricing,
- plus some are betting on El Nino swapping to La Nina (50% for winter of 2016) and having a really frigid winter(s), and
- others are thinking the LNG exports will take off…
In January I blogged about when Chesapeake’s stock tanked and brought down with it stock pricing in the midstream sector (piplines/compressor stations).
Yesterday I blogged about another natural gas drilling operator planning debt-for-equity-swap type bankruptcy that cost the investors, but means the operations are not affected…this so as to protect the lenders…. https://barnettshalehell.wordpress.com/2016/04/12/bankruptcy-fracking-investment-in-goodrich-poor-people/
By Patrick Fitzgerald April 1, 2016 4:52 p.m. ET wsj.com
“Prepackaged bankruptcies—meaning a company files for chapter 11 with an exit plan in hand that has already been approved by creditors—…. senior lenders would be paid in full or have their debt reinstated. The reorganized Goodrich, which drills for crude oil and natural gas in the Tuscaloosa Marine shale formation in Louisiana and Mississippi, would emerge from the anticipated bankruptcy as a going concern with its day-to-day operations substantially intact”.
In contrast to the Goodrich (planned) pre-packaged bankruptcy was the recent ASSET sale of Quicksilver last January to Blueridge…new owners now and some of these old Quicksilver padsites are adjacent to our Lake Arlington drinking water supply and YES we have laterals under that lake!
And then there is THIS!
Regardless of the type of saving graces for these padsites in our neighborhoods from:
- banks taking on risk (Chesapeake),
- debt-for-equity chapter 11 (Goodrich), or
- bankruptcy auctions of assets to new ownership (Quicksilver to Blueridge),
- asset sales to reduce debt in lieu of bankruptcies
in the end it is the citizens taking on the risk.
We are STAKEHOLDERS in breathing the air living near these padsites & drinking water (surface or ground) that may become or are-already-showing-signs-of O&G contamination (right here in Arlington).
We get to stand by and helpless witness the demise of these padsites (while not an exhaustive list) to:
- second tier drillers,
- aging of infrastructures,
- crazy weather flooding out or hailing out these padsites, and possibly in the future,
- terrorism targets.
OUR quality of life and risk to OUR health hangs in the balance (or should I say BALANCE SHEETS) in this transitional time that we are trying to break from fossil fuels.
This however is happening in a slow motion pace as we try to starve off global warming which is being worsened by methane leaks from all the mining for fossil fuels that MUST be left in the ground. How can YOU help? Use less, recycle, repurpose, get solar/wind, go EV etc…..oh and ….elect BERNIE.