U.S. shale oil company files for bankruptcy

U.S. shale oil company files for bankruptcyChesapeake Energy, the poster child of the U.S. shale revolution, filed for bankruptcy protection on Sunday, Report informs, referring to CNBC.

The move comes as the company and industry more broadly have been rocked by a drop in oil and gas prices amid the coronavirus pandemic.

The heavily indebted company has been in trouble for some time, and in May, it said it had concerns regarding its long-term viability.

Chesapeake said that $7 billion in debt would be wiped out through the restructuring. The company has secured $925 million in debtor-in-possession financing to continue operations during the bankruptcy process. Besides, Chesapeake has secured an agreement in principle from certain existing lenders for $2.5 billion in debt financing on emergence from bankruptcy, as well as a backstop commitment for $600 million in new equity.