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October 26, 2020 – The Court hearing the Chesapeake Energy Corporation case has extended the periods during which the Debtors have an exclusive right to file a Plan and solicit acceptances thereof, through and including January 25, 2021 and March 25, 2021, respectively [Docket No. 1531]. Absent the relief, the Plan filing and solicitation periods were scheduled to expire on October 26, 2020 and December 28, 2020, respectively.
The Court has scheduled a hearing on the adequacy of the Disclosure Statement for October 30, 2020, a hearing which will include arguments from the Debtors' official committee of unsecured creditors (the "Committee") that the Disclosure Statement is "woefully deficient" and that the Plan it purports to support includes numeous prepetition maneuvers that render the Plan unconfirmable (including allegations as to $3.8bn of voidable preference payments, which we cover separately). Additionally, a hearing to approve the sale of the Debtors' Mid-Con assets is scheduled for November 13, 2020.
As previously reported in respect of the Debtors’ September 5th motion requesting the extension [Docket No. 1227], “The Debtors’ chapter 11 process is progressing as intended to maximize value for the Debtors’ stakeholders. Since the Petition Date, the Debtors smoothly transitioned into chapter 11 and stabilized their business operations, obtained Court approval of important procedural and operational relief, obtained $925 million of new money debtor-in-possession financing over the objections of certain creditors and the official committee of unsecured creditors (the ‘Creditors’ Committee’), obtained approval to enter into the backstop commitment agreement and pay certain fees in connection with the contemplated exit facilities, rejected burdensome contracts, filed their schedules and statements of financial affairs and on September 11, 2020, the Debtors filed a proposed chapter 11 plan of reorganization and accompanying disclosure statement.
Notwithstanding the substantial progress made to date, certain tasks remain before the Debtors may emerge from chapter 11. Most critically, the Debtors’ continue to assist the Creditors’ Committee in its investigation, the Mid-Con Asset sale process must run its course, contract negotiations and initiatives to create operational savings are ongoing, solicitation must occur and the Court must consider confirmation of the Debtors’ Plan. The Debtors and their key stakeholders continue to negotiate critical documents required for emergence, including key financing and corporate governance documents.
In light of the foregoing, and in order to promote consensus across the Debtors’ creditor constituencies, the Debtors request a 90-day extension of the Exclusivity Periods to file and solicit approval of a chapter 11 plan so that they may continue to diligently pursue and effectuate a value-maximizing resolution to these chapter 11 cases. A 90-day extension of the Exclusivity Periods is calculated to provide the Debtors with sufficient time to continue to complete their restructuring process. Given the size and complexity of their business, the Debtors’ request for additional time to complete their key restructuring initiatives is amply justified.”
About the Debtors
The Debtors are an independent exploration and production company engaged in the acquisition, exploration and development of properties to produce oil, natural gas and NGL from underground reservoirs: “We own a large and geographically diverse portfolio of onshore U.S. unconventional liquids and natural gas assets, including interests in approximately 13,500 oil and natural gas wells. We have significant positions in the liquids-rich resource plays of the Eagle Ford Shale in South Texas, the stacked pay in the Powder River Basin in Wyoming and the Anadarko Basin in northwestern Oklahoma. Our natural gas resource plays are the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana.
In February 2019, we acquired WildHorse Resource Development Corporation, an oil and gas company with operations in the Eagle Ford Shale and Austin Chalk formations in southeast Texas, for approximately 717.4 million shares of our common stock and $381 million in cash, and the assumption of WildHorse’s debt of $1.4 billion as of the acquisition date of February 1, 2019. The acquisition of WildHorse expands our oil growth platform and accelerates our progress toward our strategic and financial goals of enhancing our margins, achieving sustainable free cash flow generation and reducing our net debt to EBITDAX ratio.”
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