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Chesapeake Energy Corp. CHK, -4.42% warned Monday that it may not be able to stay in business as weak oil and natural gas prices imperil a yearslong effort to pay down hefty debt.
The shale-drilling trailblazer said it has hired advisers to explore options including bankruptcy and raised doubt about its ability to remain a “going concern” as it reported a first-quarter loss of about $8.3 billion, compared with a loss of $21 million during the same period a year earlier. The company wrote down the value of its oil and gas assets by about $8.5 billion.
The Oklahoma City company, co-founded by the late wildcatter Aubrey McClendon, was once among the biggest companies in the American fracking boom. But it has been selling off pieces of itself for years to try to whittle away at substantial debt it incurred aggressively leasing land for drilling around the U.S. That path has narrowed in recent months as oil demand and prices have tumbled while people hunker down to avoid the new coronavirus.
Oil and natural gas prices settled around $25 a barrel and $1.82 per million British thermal units on Friday, respectively.
