Chesapeake peers over the precipice

Rapid expansion beyond core natural gas assets has stretched the firm to the verge of bankruptcy

The US shale sector may be able to take a deep breath after months of ruinously low oil prices, as the unprecedented drop in global energy demand was compounded by a domestic storage crisis. The gradual easing of economic restrictions and swingeing output cuts have lifted WTI above $40/bl, barely two months after futures contracts plunged into negative territory for the first time in history. But for US independent Chesapeake Energy the welcome news risks being too little, too late. The firm is on the brink of bankruptcy following missed payments that were due on 15 June and the loss of $700mn in available credit. Chesapeake has just 30 days to avoid default before becoming the most high-pro