NEW YORK — Chesapeake Energy insists it’s not plotting a bankruptcy filing.
The natural gas and oil giant was forced to issue a statement on Monday after its stock tanked over 50%.
Chesapeake said it “currently has no plans to pursue bankruptcy” and is “aggressively seeking to maximize value for all shareholders.”
Chesapeake stock rebounded off the lows on the news, but was still off 22%. The stock hit several circuit breakers earlier in the day before being halted, so the company could release a statement.
The plunge was fueled by a Debtwire report indicating Chesapeake had recently started working with restructuring attorneys from Kirkland & Ellis to discuss “balance sheet options.”
However, Chesapeake’s statement noted that Kirkland & Ellis has served as a counsel since 2010 and continues to advise the company on its balance sheet.
Chesapeake has been rocked by the plunge in oil and natural gas prices. Like other companies, Chesapeake took on a lot of debt during the boom years to finance its expansion.
But now that cash flows have been choked off by cheap energy prices, Chesapeake is struggling with nearly $11 billion of debt. Late last year, Chesapeake was forced to cut its debt by offering a debt exchange.
Billionaire Carl Icahn is a major Chesapeake shareholder. The billionaire investor owned 11% of Chesapeake’s stock as of the most recent reporting period, according to FactSet.