Two days after announcing a large, companywide layoff, Chesapeake Energy is back in the news, as company leaders continue efforts to solidify Chesapeake's financial footing.
In his letter to employees Tuesday, Chesapeake CEO Doug Lawler said the company must remain focused on building an enduring, resilient and profitable enterprise. That statement helped explain the 740 layoffs, 15-percent of Chesapeake's workforce, and it explains why the company restructured its credit line.
Chesapeake announced late yesterday that it had renegotiated its $4-billion line of credit with its bank syndicate group.
The credit facility, which Chesapeake first announced in December of last year, goes from unsecured to secured, meaning the company had to put up collateral.
Under the deal, the credit line could revert to unsecured, if certain conditions are met.
"Along with opportunities for additional proceeds from potential asset divestitures, joint ventures and farm-out agreements, and an estimated reduction in our 2016 cost structure of more than $200 million...this amendment places Chesapeake in a position of greater strength and flexibility," said Chesapeake CFO, Nick Dell’Osso.
Chesapeake stock was down slightly on Thursday, less than two percent, to $7.20. But that's still up almost 10-percent since bottoming out at the close of trading on Monday.