Chesapeake Energy Corp (CHK)

[LouisDesyjr]

Not until they run through the line of credit

They are good until 2017 at least. Unless something strange happens and the line of credit get cancelled, the company is good though 2017 since the line of credit will not be reviewed until mid 2017.

Of course, the problem is that as they continue to lose money, and end up drawing down the line of credit, it pushed the common shares further to the back of the line in any recovery.

I think the most likely outcome, unless there is a massive spike in the price of NG (like $9/MMBTU) is that the common shares will be a 'zombie' with the company not filing BK but the company not making any money either.

If BK does come for the company someday, I expect it will not be until the whole $4B line of credit is drawn down, and that could take a while, like over a year, maybe as long as three years.

Louis J. Desy Jr.