Chesapeake’s Stocks Noted the Biggest Single Day Climb on Tuesday
On Tuesday, Chesapeake's stock climbed thirty four percent gaining from the previous day. It is the biggest single day gain since 1993, when the Oklahoma City based oil and natural gas company went public.
Chesapeake announced that its banks agreed not to pull out a credit line of close to $4 billion and that was cheered by investors and analysts. That was big as the crash in oil prices have made it increasingly difficult for Chesapeake to pay its massive $10 billion debt load.
The company earned some extra time with the banks by delaying its next review by creditors till June next year, till it continues to maintain some financial metrics.
David Holt, an analyst at S&P Global Market Intelligence raised his Chesapeake price target from $3 to $6 a share and said, "This definitely extends the runway for liquidity."
Chesapeake founded by Aubrey McClendon, who died this year in a car accident is considered a pioneers of shale oil in the U.S.
Other analysts are also optimistic about the company.
Citigroup upgraded the energy company's 2017 and 2018 junk bonds to "buy" and said that the new agreement has given the company "time to ride out a low commodity price environment."
However, shares of Chesapeake are down close to sixty percent compared to last year.