Chesapeake Energy said Monday that it has no plans to file for bankruptcy after media reports claimed the company was looking into restructuring options.
Chesapeake, the second largest gas producer in the United States, confirmed that law firm Kirkland & Ellis LLP is advising the company “as it seeks to further strengthen its balance sheet following its recent debt exchange.”
“Chesapeake currently has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders,” the Oklahoma-based company said.
The company added that Kirkland & Ellis LLP has served as one of its counsel since 2010.
The statement came in response to media reports that the company had asked Kirkland & Ellis LLP, a well known restructuring specialist, to explore possible restructuring options.
Shares in Chesapeake tumbled to a low of $1.51 per share on Monday before bouncing back up to $2.05 per share at the closing bell.
Chesapeake suspended payment of dividends on each series of its outstanding convertible preferred stock in late January.
CEO Doug Lawler said the dividend suspension will allow the company to retain about $170 million of additional cash per year and “use these funds to purchase debt at significant discounts in the near term.”
Chesapeake fell to a $4.69 billion net loss in the third quarter but still manged to beat analysts earnings expectations.
The company had $5.7 billion in cash and undrawn credit facilities as of September 30.
Chesapeake will release its fourth quarter 2015 and full year results on February 24.