Hundreds cut as bankruptcy process draws to a close


Chesapeake Energy has lost about 15% of its staff this week as it nears the finish line of its bankruptcy process.

The decision to lay off 220 workers, mostly from its Oklahoma City headquarters, is tied to ongoing economic factors created by COVID-19 that are impacting demand for oil and natural gas, officials said. business.

At the same time, the company is in the process of concluding what it needs to accomplish before it officially emerges from bankruptcy, which is expected to happen sometime next week.

On Monday, he announced he was able to successfully raise $1 billion in unsecured debt.

Layoff details

Employees were made aware of the latest round of staff cuts at Chesapeake Energy in an email sent by CEO Doug Lawler that was obtained Wednesday morning by Oklahoma.

While Lawler wrote that the company had made significant progress in restructuring its operations so that it would be a stronger, more competitive company post-bankruptcy, he added that current oil and natural gas price conditions justified this latest round of reductions.

This point was underscored by a spokesperson in the Gordon Pennoyer statement released on Wednesday.

“As we prepare to complete our restructuring, we continue to carefully manage our business and workforce to adapt to challenging market conditions and position Chesapeake for sustained success,” Pennoyer said.

Affected employees receive a severance package that includes a cash payout and the final cash payout of the company’s 2020 bonus program and career transition assistance offer. Lawler wrote that he personally thanked every departing employee for their service to the company.

“We need to continue to focus on creating efficiencies across our business. These factors led to the painful decision to reduce our workforce,” he wrote.

In the email, Lawler said affected Oklahoma City workers were notified by phone this morning, while field staff who were laid off were notified Tuesday afternoon.

“We would prefer to make these difficult notifications in person, but we are unable to do so due to current health issues that are well known to all.”

After the layoffs, Chesapeake Energy’s employee count stands at about 1,300, with 800 people working in Oklahoma City, a spokesperson said Wednesday.

About this debt

If the reported interest is any indication, it would appear that investors are confident about Chesapeake Energy’s future.

On Tuesday, the company announced that investors had acquired $1 billion through an offering of unsecured debt issued by the company to raise funds for its post-bankruptcy operations.

This debt offering, compared to a Chesapeake issued in December 2019, signals a new attitude on the part of investors.

The December 2019 offering of $2.3 billion carried a coupon (interest) rate of 11.5%, and the debt offering was to be secured by Chesapeake assets.

This latest transaction offered investors unsecured debt at a weighted coupon rate of just 5.68%, with $500 million of notes maturing in 2026 and the remainder maturing in 2029.

At least one financial news service published an article on Wednesday indicating that there was far more interest in acquiring investor debt than there was available debt, with investors placing orders worth over $12 billion.

Business writer Jack Money covers Oklahoma’s energy and agricultural beats for the newspaper and Oklahoman.com. Contact him at [email protected] Please support his work and that of other Oklahoman reporters by purchasing a subscription today at oklahoman.com/subscribe.

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