"Despite having removed over $US20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business."
Chesapeake is partly a victim of its own success - and that of its peers - in extracting gas from shale basins, which contributed to a global glut and weighed on prices. Even before the coronavirus, the company had struggled for years with a heavy debt load accumulated during an earlier period of aggressive expansion.
About a decade ago, Chesapeake was a $US37.5 billion giant led by the late Aubrey McClendon, a colourful and outspoken advocate for the natural gas industry. It was at the forefront of the fracking revolution that transformed the US oil and gas industry by setting off a scramble for previously untapped shale reserves. The company cut eye-popping checks to Fort Worth businesses and residents as inducements to drill on their land in the Barnett Shale of North Texas, America's first shale field to hit the big time.
Those heady days didn't last. US natural gas slumped after the financial crisis as the frackers overwhelmed demand, and prices still haven't revisited their previous highs. Investors soured on Chesapeake, which by that point wasn't only debt-laden but saddled with a real estate empire that included shopping centres, a church, and a grocery store. McClendon was ousted in 2013 and was killed in an auto accident three years later.