Chesapeake Energy Corp. Breaksout After Agreement with Opec but Falls on Bankruptcy Reports

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Energy company Chesapeake Energy Corp. was soaring on Monday, nearly tripling in active trading after Wall Street learned of an agreement that was signed by major oil producing nations over the weekend to extend production cuts.

Crude oil prices were also seeing gains on better than expected economic data recently.

Oil and gas producer Chesapeake saw its stock soar 195% in midday trading, which would be a one-day record gain. The stock also moved up 76.5% on Friday.

Shares of Chesapeake had exploded more than 8-fold since closing at a record low of $8.71 on May 14, and 350% since April 15, when a 1-for-200 reverse stock went into effect.

In after-hours trading however the stock fell over 5% after a Bloomberg News report said the natural-gas producer is preparing to file for bankruptcy.

Citing people familiar with the matter, the Bloomberg News report said that the filing could hand over control of the company to its senior lenders.

Chesapeake is negotiating a restructuring support agreement that could lead some lenders to take most of the equity in bankruptcy, although the terms of the agreement could change, the report said.

Disclaimer: We have no position in Chesapeake Energy Corporation (NYSE: CHK) and have not been compensated for this article.