Just got word that Dougie is working on his big end of year pep talk. Word on the street is that the theme is, "If you thought 2015 was surprising, just wait and see what I have in store for 2016!!!!!" For almost three years he has been preaching about driving value, pushing value. It seems he just conveniently forgot to include the word DOWN in all of those catchphrases.
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Who cares about OKC, the company needs a major downsizing there and let field offices take charge!
Well that's not true. Anyone could have brought in a fleet of consultants and co-opted their vision of 1MM boepd production, new departments, and systems. What CHK needed was a real turnaround CEO that could recognize the severe lack of controls, make massive cuts, and quickly sell assets to fundamentally RESTRUCTURE the company. That time has passed and it's all about fire sales now. Preserving the few remaining jobs and "company" is kind of immaterial now.
If Lawler hadn't arrived in 2013 - the doors of CHK would have already closed. CHK will survive because of the debt and no one wants to buy it. It will be a leaner and meaner company when this hell is over. Just take your seat on the sidelines former CHK'ers and quit writing and wishing the demise for a business/industry that okc so desperately needs to survive.
Anadarko had to deal with this issue when it spun off Tronox. It's not "fraud" as what we may be familiar with. It's a legal bankruptcy term. Basically it means that if you sell assets and file for bankruptcy within one year, those deals may be undone and proceeds returned as such transactions "took" assets away from creditors, decreasing their ultimate recoveries. The case for this is stronger when the company is deemed to be in the "zone of insolvency" with trouble meeting its debt obligations and doubts about its status as a going concern. So for CHK, with the equity and debt markets pointing to significant bankruptcy risk - I would say it's in that zone. I am not a lawyer, but common sense would tell me that's the case.
Upshot is, asset sales at this point are now very tricky - Lawler was at Anadarko so I am sure he's very familiar with this issue. So we're really caught between a rock and a hard place. The only way out it seems is an out-of-court debt restructuring, (i.e. the current exchange offer). If this doesn't happen, I would bank on a filing in Q1 or Q2 2016 at the latest. If they file now, the recent asset sales may be at risk of becoming undone (I think).