Chesapeake Energy Chief Executive Officer Doug Lawler said the company continues to “strongly believe” in its capital and operating program and will proceed with measures to improve its financial position.
The statement comes a week after the company said in its third-quarter earnings filing that it had “substantial doubt” in its ability to continue as a going concern, explaining that continuing low crude oil and natural gas prices could result in its inability to comply with the leverage ratio covenant under its revolving credit facility.
Chesapeake’s share price on 12 November closed at 67¢/share, its lowest point in more than 25 years. The company currently has a $1.4-billion equity market capitalization compared with $9.7 billion in debt.
The stock was weighed down by the news that NGP Energy Capital Management, among Chesapeake’s largest shareholders, made an in kind pro rata distribution of the shares to partners of the funds.
Lawler reiterated in the statement that the company plans to cut its capital expenditures by 30% in 2020. He added that Chesapeake has “substantial liquidity with no significant near-term maturities” and remains confident in its long-term liquidity. “We continue to pursue strategic levers to reduce debt, including asset sales, capital markets transactions, and focus on cost discipline,” he said.
Chesapeake for the third quarter reported a net loss available to common stockholders of $101 million.