The New York Times discusses why Chesapeake Energy, a fracking pioneer, is reeling. The company, which has said it could file for bankruptcy protection, helped turn the U.S. into a gas exporter but became known for an illegal scheme to suppress the price of oil and gas leases.
Shares of Chesapeake Energy, a pioneer in extracting natural gas from shale rock that came to be known for its excesses, including a scheme to suppress the price of oil and gas leases, went on a wild ride on Tuesday amid reports that it was preparing a bankruptcy filing.
Trading was halted for more than three hours in the morning. After buying and selling resumed, the trading was quickly interrupted again by circuit breakers. The company’s shares closed just below $24 for a loss of about 66 percent for the day.
Chesapeake’s successes at using hydraulic fracturing to produce gas helped convert the United States from a natural gas importer into a major global exporter. But the company overextended itself by amassing a large debt and has been struggling to survive over the last decade. It is the latest of more than a dozen heavily indebted oil and gas businesses to seek bankruptcy protection since the coronavirus pandemic took hold and Saudi Arabia and Russia flooded the global market with oil this spring.