(04-15-2020, 11:03 AM)Otter Wrote: I think CHK is toast, but they have somehow managed to hold on as a zombie company for much of the past decade. That 200/1 reverse split has to be some sort of a record.
XOM has issued about $20 billion in new debt in the past couple weeks. That would cover roughly a year of dividend payments at the current level, but I suspect they use quite a bit of it to buy distressed assets.
I think an uptrend in crude itself will occur before a lot of the bankruptcies and dividend cuts are actually announced, but am curious to see what pricing looks like when storage limits are reached and demand is still essentially nonexistent.
I don't see any way CHK makes it either. It's down 36% today following the reverse split, and now has a market cap of just $167M against a debt and liabilities load of nearly $12B.
OXY paid its preferred dividend to BRK with 17.27 million in new shares rather than cash this morning, further diluting shareholders and adding another $7.6 million in annual future dividend payments on the issued shares. This will happen every quarter going forward as there's no way the company can afford the $200M payment on the preferred in the current operating environment.
There's going to be a LOT of bankruptcies in the sector.