Restructuring Information

On June 28, 2020 after careful deliberation, Chesapeake Energy Corporation voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court. This was not an easy decision, but it was a necessary one, given our legacy debt and contractual obligations. We are confident that this is the best path forward for Chesapeake, and that we will emerge from the Chapter 11 process as a stronger and more competitive company. On February 9, 2021, Chesapeake successfully concluded its restructuring process and emerged from Chapter 11, satisfying all conditions precedent under its Plan of Reorganization.​

Chesapeake entered into a Restructuring Support Agreement (“RSA”) with 100% of the lenders under its revolving credit facility, holders of approximately 87% of the obligations under its Term Loan Agreement, approximately 60% of its senior secured second lien notes due 2025, and approximately 27% of its senior unsecured notes, pursuant to which Chesapeake will implement a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt.

Through the restructuring process, Chesapeake will continue to operate the business as usual. We have secured $925 million in debtor-in-possession (“DIP”) financing from certain lenders under Chesapeake’s revolving credit facility, which will be available upon Court approval. The financing package provides Chesapeake the capital necessary to fund its operations during the Court-supervised Chapter 11 reorganization proceedings. The Company and certain lenders under Chesapeake’s revolving credit facility have also agreed to the principal terms of a $2.5 billion exit financing, consisting of a new $1.75 billion revolving credit facility and a new $750 million term loan. Additionally, the Company has the support of its term loan lenders and secured note holders to backstop a $600 million rights offering upon exit.

The Chapter 11 process gives us the opportunity to fundamentally reset our business and strengthen our capital structure in a sustainable way, so we can capitalize on our significant strengths and prosper regardless of commodity prices. By addressing the legacy debt and contractual obligations that have hindered our performance, we are positioning Chesapeake to capitalize on our dedicated people, diverse operating platform with untapped opportunities, proven track record of improving capital and operating efficiencies, and technical excellence.

This announcement includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements regarding: (i) the effect of the Chapter 11 reorganization and sufficiency of the DIP and exit financing packages; (ii) our ability to continue implementing capital/operating efficiencies and technical developments, strengthen our capital structure in a sustainable way, and prosper regardless of commodity prices; and (iii) our ability to capitalize on the reorganization and emerge as a stronger and more competitive enterprise. Although we believe the expectations and forecasts reflected in the forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties. Important risks, assumptions and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are described under “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2019. Chesapeake undertakes no obligation to release publicly any revisions to any forward looking statements, to report events or to report the occurrence of unanticipated events.