REPORT: Chesapeake Has $1.4 Billion In Off-Balance-Sheet Debt

kate upton aubrey mcclendonAubrey McClendon with relative Kate Upton

Photo: The Lost Ogle

The Wall Street Journal‘s Russell Gold reports this afternoon that Chesapeake Energy carries $1.4 billion in undisclosed liabilities.  Yesterday, we wrote about Argus Research analyst Phil Weiss’ opinion that nation’s second-largest natural gas producer is loaded with off-balance-sheet obligations.

Gold’s story now puts a figure on that sum.

He reviewed 10 volumetric production payment agreements, filed in county courthouses in four states, to arrive at the total. VPPs are mortgages that use the promise of future drilling returns as collateral. 

The documents that Chesapeake’s liabilities are “far larger than previously believed by investors and analysts who cover the stock.”

What’s more, most of this obligations are due this year and next year, “at a time when Chesapeake is scrambling to raise cash to cover its operating costs and move into the more lucrative oil business,” Gold writes.

Read the full story at The Wall Street Journal.

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