Shale Giant On The Brink Of Bankruptcy Receives Federal Lifeline

The federal government has allowed bankrupt shale major Chesapeake Energy to stop drilling at more than 100 leases on federal lands without losing ownership of the assets, Reuters has reported, citing data that shows the approvals have been granted since the start of the coronavirus crisis. The company, according to the data, first applied for permission to suspend drilling across these leases in late April. By mid-May, the Bureau of Land Management had granted it 108 approvals, Reuters reports. The BLM has been granting permission to oil companies to suspend drilling in federal leases without losing their ownership on a case-by-case basis. However, the suspensions are not indefinite. Most of them expire at the end of this month, Reuters noted. While the BLM could grant an extension, it is unclear whether it can grant one to a company that is effectively bankrupt. Last week, media reported, citing unnamed sources, that Chesapeake was preparing to file for Chapter 11 bankruptcy protection after it missed a bond payment due Monday, June 15. The missed deadline was the beginning a grace period for negotiations with bondholders, but the company has decided to file for Chapter 11 protection instead, in the coming weeks. If the bankruptcy filing materializes, it would make Chesapeake the largest shale player to date to go under in the current crisis...MORE