Upstream: Restructuring: Chesapeake Energy: Financial Advisor To The Official Committee Of Unsecured Creditors

Upstream: Restructuring: Chesapeake Energy: Financial Advisor To The Official Committee Of Unsecured Creditors

Chesapeake Energy Corp. (“the Company” or “Debtor”) engages in domestic exploration and production of oil, natural gas, and natural gas liquids. The Company holds interests in natural gas resource plays, including the Marcellus in the Northern Appalachian Basin in Pennsylvania; Haynesville located in Northwestern Louisiana; Eagle Ford in South Texas; Brazos Valley in Southeast Texas; Powder River Basin in Wyoming; and Mid-Continent in the Anadarko Basin of northwestern Oklahoma. The company was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.

Opportune was engaged by the Official Committee of Unsecured Creditors (“UCC”) to serve as a financial advisor during Chesapeake’s Chapter 11 bankruptcy filing dated June 28, 2020.

  • Wrote, filed, and defended two separate expert reports; one of which focused on valuation and the other on solvency at various points in time over the Company’s history.
  • The Debtors’ asset base was large and complex with material value located in different asset basins with unique geology and extraction techniques. Opportune’s team of engineers analyzed the reserves individually and completed a full valuation of the Company under multiple valuation methodologies.
  • The debtors consummated a significant acquisition in the years before filing and completed various other transactions to de-lever and improve cash flows. Opportune analyzed the solvency of the debtors at various points in time to determine whether a fraudulent transfer existed.
  • As the UCC’s advisor, Opportune completed complex valuations, and solvency analyses, assisted on various ad hoc requests, and provided strategic advice throughout the long, difficult confirmation hearing.

Highlights of Opportune’s role included:

  • Opportune’s Managing Partner provided expert witness testimony regarding solvency at specific points in time.
  • Opportune’s Managing Partner provided expert witness testimony regarding valuation, focusing on certain entities held by the Company, as well as the whole enterprise.
  • The UCC team’s efforts compelled the judge to approve a total enterprise value (TEV) approximately $1 billion higher than the Debtors’ proposed value, which increased the general unsecured claimants’ recovery by almost 50% when compared to the Debtors’ proposed plan of reorganization.

Opportune leveraged its Restructuring, Valuation, and Reserve Engineering & Geosciences service lines to deliver expertise unmatched in the market. Our willingness to put in the long hours and take on the risk associated with the engagement was lauded by other case parties and led to a significantly greater recovery for general unsecured creditors than what would have been afforded without our work.

Since its inception, Opportune has been one of the most active financial advisory firms in the energy sector. Our restructuring experience, coupled with our energy-industry expertise, maximizes value for constituents in a distressing situation. We think strategically, and deliver results both operationally and financially through hands-on, actionable implementation to meet the challenges of business turnarounds. We serve equity, secured lenders, unsecured creditors, and others throughout the capital structure to enhance value and increase recoveries during times of operational and financial crisis. For more information on our Restructuring services, CLICK HERE.

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David Baggett

David Baggett

Managing Partner
Gregg Laswell

Gregg Laswell

Managing Director

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